Lebanon's Central Bank has reported a significant surge in its dollar reserves, as it increased its purchases of US dollars and sold Lebanese pounds during the first two weeks of December 2024, Al-Akhbar reported. 

According to sources from the Central Bank, it collected $27 million during this brief period, adding to the freely usable foreign currency reserves—the portion of reserves not tied to "depositors' money."

Over the past year, the Central Bank has managed to accumulate approximately $2 billion in these freely available reserves. However, doubts had emerged in recent months, particularly due to the war and its impact on the Lebanese economy, about the bank’s ability to continue this trend. Recent developments, however, suggest that two key factors may allow the Central Bank to maintain its momentum.

The first is the influx of financial support for reconstruction and humanitarian relief efforts in Lebanon during and after the war. These funds have helped the country stabilize its financial situation.

The second key factor is the revival of Lebanon’s tourism sector, which has seen a significant boost following the ceasefire. Since the ceasefire was put into place, Lebanon has welcomed 1,705 incoming flights, carrying 100,251 passengers. In contrast, 1,674 flights have departed, transporting 192,200 passengers. This results in a net influx of approximately 58,900 visitors to Lebanon—a surplus that outpaced the same period in 2022, when the country saw an influx of 56,900 passengers.

In recent years, Lebanon’s tourism activity has been largely driven by expatriates returning home for their annual vacations. These visitors have played a crucial role in revitalizing sectors closely tied to tourism, including restaurants, hotels, and retail businesses. The return of a substantial number of expatriates has also helped the Central Bank boost its dollar purchasing activities, as these visitors bring foreign currency into the country.

This uptick in tourism activity is occurring despite the 60-day ceasefire still being in effect, and amid continuing security concerns, particularly with the instability in neighboring Syria. The strong performance of the tourism sector points to the potential for a more sustained recovery, especially if security conditions in Lebanon continue to improve.

The increase in foreign currency reserves could further enhance the Central Bank’s ability to purchase US dollars from the market and expand its foreign currency holdings, helping ensure greater stability in Lebanon’s exchange rate. Moreover, these reserves could serve to meet the state’s foreign currency needs, contributing to long-term economic stability in the country.