Regulatory Alerts2001-09-20 | 7926Investment of Banks in Foreign Currencies at BDL
The Banque du Liban issued Basic Decision No. 7926 (Basic Circular No. 86) to reduce the mandatory foreign currency deposit rate for Lebanese banks from 14% to 11%, with the resulting difference exclusively funding liquidity requirements under recent circulars. Banks must subscribe to interest-free Lebanese treasury bills or Eurobonds in seven installments, representing 10% of their foreign currency deposits as of October 2002, while maintaining a special minimum reserve account to cover rate reductions. The decision establishes calculation methodologies for treasury bill valuations, repo eligibility, and penalty interest for non-compliance, taking immediate effect upon publication in the Official Gazette.
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