BDL issued Intermediate Circular 13495 on I/11/2022 in which it stated two articles. Article 1 reduces by 50% the interest rate it pays Banks on their long-term USD deposits at BDL; however, BDL will continue to pay half the interest on these deposits in USD and the other half in LBP. Article 2 reduces by 50% also the interest rate it pays Banks on their investments in USD CDs issued by BDL; similarly, BDL will continue to pay half the interest on these CDs in USD and the other half in LBP. The Circular is valid for 6 months since the day it was issued.
Interesting to note that, by August 2022, the interest rate on USD deposits at BDL averaged 3.90%; whereas the interest rate on USD CDs issued by BDL averaged around 7%. In addition, Banks’ total placements at BDL were close to $83 billion, more than two thirds of them in USD, and constituting 64% of Banks’ total assets. Lastly, this circular is issued at a time when banks’ USD net interest margin stood at 3.73%.