Lebanon’s central bank has recorded significant gains in its gold reserves amid rising global prices, narrowing the financial gap on its balance sheet and strengthening its overall solvency, according to recent central bank data cited by Al-Modon.

The bank’s gold holdings are revalued every 15 days in line with market prices, and each spike in global gold prices translates into book profits, even if the reserves are not immediately usable as liquidity due to legal restrictions. Analysts say these gains are critical for restoring financial stability and easing pressure on the central bank’s obligations.

According to the central bank’s statements, gold reserves rose from $31.47 billion in late August to $38.74 billion by mid-October, representing an increase of $7.27 billion, or 23%, in just six weeks. Since the start of the year, gold reserves have climbed from $24.1 billion, an overall 61% increase.

Foreign currency reserves also showed modest gains, rising from $11.67 billion in late August to $11.78 billion by mid-October, reflecting the bank’s continued capacity to buy dollars from the market.

Other balance sheet items remained relatively stable. Public revenues deposited with the central bank rose from $7.85 billion to $8.19 billion over the same period, enabling the bank to absorb Lebanese pounds from the market while maintaining a steady money supply. Circulating currency remained between 72.86 and 74.43 trillion Lebanese pounds.

The World Bank highlighted in its latest report that these surpluses provide the government with a buffer against future economic shocks, while cautioning that increased spending on institutional capacity, salaries, essential services, and investment projects is needed. The report offered a subtle critique of Lebanon’s fiscal and monetary policies, which some experts say have been overly conservative.

By mid-October, the combined value of gold and foreign currency reserves reached $50.53 billion, compared with the central bank’s liabilities of $84.24 billion, indicating a notable narrowing of the financial gap.

Financial analysts note that the recent rise in gold reserves will facilitate the drafting of legislation to address Lebanon’s financial gap, given the reduced losses on the central bank’s balance sheet. However, it is important to remember that these gold reserves remain unusable at present, and there is no serious intention to liquidate them. This means the law will likely need to phase payments of remaining obligations in the balance sheet, even after financial equilibrium is restored.