Towards the end of year 2020, Governor Salameh mentioned in an interview that “Lebanese households hoard $10 billion in cash”[1]. That Lebanese households should hoard dollars in a crisis that is considered one of the worst three crises that the world has seen since the middle of the 19th century is not really surprising; what is surprising, however, is the extent of the hoard, equal to close to one fifth of the country’s GDP before the crisis, as declared by the Governor. Also surprising is that hardly any rigorous attempts were undertaken to estimate the actual USD hoardings by Lebanese households.
What we would like to do in this short note is to provide a preliminary estimate of these USD hoardings. We are going to adopt a two-steps methodology towards that end: first, calculate USD deposit withdrawals and then estimate how much of these withdrawals were kept in the country; second, estimate the excess LBP currency holdings and then calculate their conversions to USD cash holdings at the parallel or free-market exchange rate.
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