Lebanon's financial gap law is unlikely to be enacted for another six to eight months, Central Bank Governor Karim Souaid said, as unresolved differences between Lebanese authorities and the International Monetary Fund continue to delay agreement on one of the country's most sensitive financial reform measures.

In an interview with CNN Business Arabic, Souaid said efforts were underway to reconcile outstanding concerns over the draft legislation, which is intended to determine the scale of losses from Lebanon's financial collapse, how those losses will be distributed and how depositors will eventually recover their money.

The legislation, formally known as the Financial Regularization and Deposits Recovery Law, remains a crucial missing piece in Lebanon's efforts to address the economic crisis that has gripped the country since 2019.

Its passage has taken on added importance following amendments to the Banking Sector Restructuring Law approved in August.

Souaid said the government had approved the draft financial gap law at the end of 2025, but Banque du Liban had subsequently raised concerns, while the IMF had submitted what he described as “strong” or “serious” reservations.

Work is now underway to bring the different positions closer together, he said, adding that he hoped an agreed version of the draft would be referred to Parliament by the end of September.

But Souaid cautioned that Lebanon's notoriously slow legislative process could significantly delay its final adoption.

“If we judge by the pace at which laws are passed in Lebanon, I do not believe it will be issued before six to eight months,” he said.

$79.5 Billion in Liabilities and Questions Over 'Irregularities'

Addressing the fate of deposits trapped in Lebanon's banking system, Souaid said Banque du Liban's obligations to commercial banks and depositors currently stand at around $79.5 billion and could decline to approximately $79 billion by the end of the year.

He said cumulative payments made to depositors under Circulars 158 and 166 had reached about $6.1 billion.

Asked whether depositors would ultimately have to absorb part of the losses, Souaid pointed to what he described as “irregularities” in liabilities recorded on Banque du Liban's balance sheet, saying such amounts could account for as much as 30% of their total value.

The remaining legitimate amounts, once subjected to a detailed audit, could be repaid to depositors over several years, either in cash or through bonds, he said.

Banque du Liban has previously used the term “irregularities” to refer to claims it considers potentially illegitimate. These include deposits of unknown origin, book transfers from Lebanese pounds into U.S. dollars carried out after the financial crisis began without corresponding actual funding, and interest payments that the central bank considers inflated.

Determining how such amounts will be identified, separated and ultimately assigned remains one of the most contentious issues in negotiations involving depositors, commercial banks and the Lebanese state.

Gold for Depositors, Not for the State

Souaid also outlined a conditional position on Lebanon's gold reserves, saying he was opposed in principle to selling them without a clearly defined framework but would not completely rule out such a step if the central bank faced an urgent obligation to depositors that it could not meet through other means.

“I am against selling the gold without a defined framework, and in principle, I am not in favor of selling it,” he said.

He added that any consideration of selling gold could only be justified if Banque du Liban faced obligations it was unable to meet and there was an urgent need to make payments to depositors.

“The gold is not intended for state projects, nor to pay on behalf of the state or the banks,” Souaid said.

His remarks did not amount to a decision to sell Lebanon's gold reserves, and such a decision would not rest with the central bank governor alone.

Law No. 42 of 1986 prohibits the direct or indirect disposal of Banque du Liban's gold holdings unless Parliament authorizes it through specific legislation.

Souaid said the central bank also held other real estate and financial assets that could potentially be used to meet its obligations. He expressed hope that an improvement in Lebanon's political situation would help the country avoid having to sell its core assets.

$12 Billion in Foreign Assets, but Not Freely Available Reserves

Asked whether there was a minimum level of foreign reserves below which Banque du Liban should not fall, Souaid said it was impossible to establish a fixed “red line” given the depth of Lebanon's economic crisis and the continuing conflict.

He stressed that the roughly $12 billion in foreign assets reported on the central bank's balance sheet did not represent a pool of reserves freely available for Banque du Liban to use.

The figure includes mandatory reserves deposited by commercial banks, as well as deposits belonging to the Lebanese state, he said.

Souaid also praised the Finance Ministry's efforts to improve tax collection and curb public spending, describing its approach as one of “fiscal discipline.”

A Stable Currency, Not an Official Peg

Souaid drew a distinction between the current stability of the Lebanese pound and a formal fixed exchange-rate regime.

“Today, we have stability in the pound; we do not have a fixed exchange rate,” he said.

He linked the currency's continued stability partly to demand generated by tax payments, noting that the Lebanese state collects the equivalent of nearly $6 billion annually in taxes denominated in Lebanese pounds.

That demand helps support the local currency and contributes to monetary stability, he said.

As for the possibility of removing zeros from the Lebanese currency, Souaid said such a move belonged to a later stage of the reform process and was not a priority under current circumstances.

He contrasted Lebanon's situation with Syria, where he said the war had ended, while Lebanon continued to face conflict and restrictions that limited the flow of foreign investment.

Souaid also addressed Lebanon's inclusion on the European Union's list of high-risk countries, saying removal from international monitoring lists was not simply a political or legal matter.

It was also a regulatory challenge, he said, requiring the country to meet the standards expected by international financial and regulatory institutions.