{"id":312891,"date":"2026-02-23T11:14:12","date_gmt":"2026-02-23T11:14:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/312891\/"},"modified":"2026-02-23T11:14:12","modified_gmt":"2026-02-23T11:14:12","slug":"lebanon-eyes-sale-of-gold-reserves-to-rescue-banks-and-the-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/312891\/","title":{"rendered":"Lebanon eyes sale of gold reserves to rescue banks and the economy"},"content":{"rendered":"

Lebanese bankers and politicians are eyeing the controversial sale or lease of part of the central bank\u2019s large gold reserves \u2014 whose value has soared along with the gold price \u2014 as a way of rescuing the country from a devastating economic crisis. <\/p>\n

Lebanon<\/a> has struggled to agree on a solution for the economic collapse that has stricken the country since 2019, but the sale of the nation\u2019s accumulated gold reserves is an unpopular solution for citizens who see it as a fix for the few at the expense of the many. <\/p>\n

\u201cThe country isn\u2019t broken financially \u2014 it\u2019s been looted by our leaders,\u201d said Ahmed Zaydan, a shop owner in Beirut who sells bottles of cooking gas. \u201cDon\u2019t sell the gold, bring us the money you stole.\u201d <\/p>\n

The crisis \u2014 in which banks cut depositors off from their funds, the government defaulted on its debt and the local currency lost more than 90 per cent of its value \u2014 was triggered by a severe foreign currency shortfall.<\/p>\n

It followed years of what the World Bank described as a \u2018Ponzi scheme\u2019 in which banks and in turn bank depositors earned unusually high interest rates on dollar deposits with the central bank, which sought to maintain the currency peg.<\/p>\n

For years, banks have resisted paying a large share of the estimated $70bn that is owed to their depositors \u2014 while the state has said it does not have the means to shoulder the burden.<\/p>\n

But Lebanon now finds itself with the chance of a windfall that could mean avoiding such difficult decisions altogether, analysts say.<\/p>\n

Lebanon\u2019s central bank has an unusually large reserve of gold for such a small country \u2014 the more than 280 tonnes it holds is second only to Saudi Arabia in the Middle East. The bank began building up gold reserves in the 1940s and 1950s to underpin the value of the Lebanese pound. <\/p>\n

That means the recent unprecedented global rise in the price of gold has had an outsized benefit. The price of gold has risen 70 per cent over the past year \u2014 to about $5,000 per ounce. <\/p>\n

The value of Lebanon\u2019s gold reserves has tripled from the start of the crisis to reach about $45bn in early 2026 \u2014 equivalent to more than half the financial losses. <\/p>\n

But Lebanese law prohibits the sale or lease of the gold, meaning parliament would need to pass legislation to allow the precious metal to be used. <\/p>\n

Meanwhile, politicians and bankers are debating a controversial law<\/a> that would determine who is responsible for paying back the depositors.<\/p>\n

\"AThe central bank began building up gold reserves in the 1940s and 1950s to underpin the value of the Lebanese pound \u00a9 Hasan Shaaban\/Bloomberg<\/p>\n

The bill is a key requirement for an IMF deal, which authorities view as crucial for recovering from the disaster. Since 2019 Lebanon has failed to implement reforms demanded by the IMF.<\/p>\n

Although the draft law \u2014 known as the financial gap law \u2014 rules out the use of gold, some analysts say it will eventually end up being part of the solution.<\/p>\n

The central bank does not have the liquidity to make the payments promised by the law, unless at least some of the gold is sold or leased, they say. The IMF has not opposed the use of the gold. <\/p>\n

Mike Azar, an expert on Lebanon\u2019s financial crisis, said that under the draft law\u2019s proposed payment schedule, the central bank could end up defaulting unless parliament authorises a sale of the gold.<\/p>\n

\u201cIf your plan is to use the gold, then just say so,\u201d said Azar. \u201cBut don\u2019t pass a law that likely doesn\u2019t work if you don\u2019t sell the gold. And hope that in the future whoever is in power will be forced to do it to avoid another default, but today say no, that\u2019s not our plan.\u201d<\/p>\n

Few have openly advocated the sale of the gold because the subject is so politically toxic. Instead, the discussions among bankers and policymakers are happening in private. <\/p>\n

One banker in favour of selling part of the gold said the banks were not making such proposals publicly because they did not want to further anger the Lebanese public. <\/p>\n

Critics say the sale of the gold would bail out banks and wealthy depositors at the expense of the general public. <\/p>\n

\u201cThese are the assets of the people. So if you\u2019re selling the gold to pay the depositors, it\u2019s like you\u2019re selling the house wealth to bail out one of the children, but you have five children,\u201d said Lamia Moubayad, president of the Basil Fuleihan Institute at the finance ministry.<\/p>\n

\u201cAccounting-wise, as a family you have no debt anymore, but basically one of your children got it all, at the expense of his siblings. And not only that, but he will repeat [his mistakes] again.\u201d<\/p>\n

\"PeopleCritics say the sale of the gold would bail out banks and wealthy depositors at the expense of the general public \u00a9 Bloomberg<\/p>\n

Industry minister Joe Issa el-Khoury has been one of the few politicians to publicly suggest selling the gold. <\/p>\n

\u201cTo improve the gap law, it would be advisable to agree to liquidate about $15bn of the gold to buy investment-grade zero-coupon bonds and give them to depositors whose deposits are greater than $100,000,\u201d he said in a post on X last month. He later clarified that it would not be to benefit the banks.<\/p>\n

Mark Daou, an independent member of parliament, said bankers and pro-bank politicians were advocating for the sale of the gold because it would reduce the repayment obligations of commercial banks to depositors. <\/p>\n

\u201cThe sale of the gold only benefits the banks,\u201d Daou said. \u201cThe entire strategy of the banks is the shifting of wealth from the state or the central bank to the banks.\u201d<\/p>\n

Ali Noureddeen, an economic researcher at The Tahrir Institute for Middle East Policy, said if the gold was sold in the short term, banks could benefit because \u201cinstead of recapitalising, they\u2019ll depend on the gold for the first years of payments\u201d. <\/p>\n

But Daou said the proposals remained largely theoretical because few politicians were willing to openly advocate it. \u201cNo MPs want to go and tell [the] Lebanese people, \u2018I\u2019m selling your assets to fix a problem for large depositors.\u2019\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Lebanese bankers and politicians are eyeing the controversial sale or lease of part of the central bank\u2019s large…\n","protected":false},"author":2,"featured_media":312892,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":{"0":"post-312891","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-ie","11":"tag-ireland"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/312891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=312891"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/312891\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/312892"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=312891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=312891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=312891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}