Lebanon is seeing a reduction in illicit financial inflows as the government moves to curb its cash-based economy, Finance Minister Yassine Jaber said, as Beirut seeks to comply with international anti-money laundering standards and avoid further isolation from the global financial system.

Speaking in an interview, Jaber said the government’s priority was strengthening state oversight rather than monitoring the finances of political parties or armed groups, but confirmed that illegal money entering the country had declined over the past year.

“Definitely,” he said, when asked whether there was less illicit funding coming into Lebanon.

The reduction, he said, was the result of a deliberate effort to limit the use of cash in the economy, which has expanded sharply since Lebanon’s financial collapse.

“What we have been doing ourselves is actually working on limiting the cash economy,” Jaber said. “Our objective, because as I said we are on the grey list, is that we don’t want to be sleepwalking to a black list.”

Lebanon remains under enhanced monitoring by the Financial Action Task Force (FATF), the global anti-money laundering watchdog. A move to the blacklist would severely restrict the country’s access to correspondent banking and international financial markets.

Jaber declined to comment directly on the financial position of Hezbollah, saying this was not within the remit of the finance ministry.

“I don’t know,” he said. “I’m looking at the state. I don’t know about any party, what state of affairs they have financially.”

However, he acknowledged that tightening controls on cash flows had broader implications for illegal activity in Lebanon, including the movement of undeclared foreign currency.

Asked about reports that Venezuela has been used as a transit point for funding linked to Hezbollah, Jaber said it was too soon to assess any immediate impact from recent developments.

“I don’t expect – I don’t think – I don’t know,” he said, adding that Lebanon’s focus was on long-term reforms rather than short-term enforcement outcomes.

Lebanon’s economy has become heavily dollarised, with cash dominating daily transactions and undermining state revenues, customs enforcement and financial transparency. Western governments and regional donors have repeatedly pressed Beirut to rein in the informal economy as a condition for restoring confidence.

Jaber said discussions with the International Monetary Fund and the World Bank were aimed at fixing domestic structural problems rather than satisfying external demands.

“We are doing things for the sake of Lebanon, not for the sake of any international organisation,” he said.

The government has recently submitted a draft budget and a package of financial reform laws to parliament, including measures aimed at restoring confidence in the banking system and rebuilding public institutions.

“Our main objective was to show seriousness,” Jaber said. “To really implement all what’s necessary to get Lebanon back on track, to become a viable state, to become a country that’s really respected and respects international rules.”

While acknowledging that recovery would be slow and politically contentious, Jaber said reducing illicit flows and shrinking the cash economy were unavoidable steps.

“There is no perfect solution,” he said. “Nobody is going to get whole.”