Salameh reinstates subsidized housing loans.
Summary: Central Bank Gov. Riad Salameh Thursday reinstated subsidized housing and productive loans worth $1.25 billion in order to maintain BDL's policy of reactivating the real estate sector and stimulating the economy.
BEIRUT: Central Bank Gov. Riad Salameh Thursday reinstated subsidized housing and productive loans worth $1.25 billion in order to maintain BDL's policy of reactivating the real estate sector and stimulating the economy. The BDL decision took effect immediately. According to the 12-page memo, the total value of the subsidized loans in Lebanese pounds will be equivalent to $750 million, with another $500 million in dollars.
BDL will offer 1 percent interest in Lebanese-denominated currency for the subsidized loans to the banks. For the dollar loans, BDL will offer interest equivalent to the upper limit of the federal funds rate.
The memo said that 15 percent of the dollar-denominated subsidized loans will be dedicated to the productive sector.
Parts of the subsidized loans in U.S. dollars will be allocated to research and development in the productive sectors and environmentally friendly projects such as energy.
The memo explained that some of the subsidized loans will finance the construction of parking lots.
It also set the amounts of subsidized loans for housing.
The subsidized loans for housing targets low- to medium-income citizens who are unable to afford to pay the current rates offered by commercial banks.
The subsidized loans have revived the real estate sector, which experienced slow sales seasons due to the economic slowdown and oversupply of properties.
The memo stipulated that the maximum subsidized housing loan should not exceed LL800 billion ($533,000) per person.
The maximum duration for paying the housing loans is 30 years, including four-year grace period.
Economists say that every $1 billion injected into the economy in the form of loans and grants can create GDP growth of 1 percent each year.
Salameh, who is currently in the United States, has repeatedly said that the Lebanese pound will remain stable thanks to the monetary policy BDL has pursued for the past 20 years, as well as its huge gross foreign currency reserves.
Copyright [c] 2017, The Daily Star. All rights reserved. Provided by SyndiGate Media Inc. ( Syndigate.info ).
|Printer friendly Cite/link Email Feedback|
|Publication:||The Daily Star (Beirut, Lebanon)|
|Date:||Oct 20, 2017|
|Previous Article:||Parliament passes first state budget since 2005.|
|Next Article:||Whisky Live returns to Lebanon -- bigger and better.|