Lebanon eyes sale of gold reserves to rescue banks and the economy – FT

Lebanon eyes sale of gold reserves to rescue banks and the economy – FT

Lebanon Considers Gold Reserves as a Lifeline for Economic Recovery

Lebanon, grappling with a severe economic crisis, is exploring the sale of its gold reserves to stabilize its banking sector and address years of financial turmoil. The country holds 286 tons of gold—approximately nine million ounces—since the 1960s, a stockpile valued at over $50 billion at its peak. This reserve, second only to Saudi Arabia's in the Middle East, has remained untouched since a 1986 law was enacted to protect state assets during the civil war.

The economic crisis, which deepened after the 2019 banking collapse, has left half of Lebanon's 6.5 million population in poverty. The financial sector incurred $70 billion in losses, exacerbated by the 2024 Israel-Hezbollah conflict. With inflation rampant and reforms stalled, officials are now debating whether to tap into gold reserves to recapitalize banks or fund public services. A senior banking official noted that some institutions propose using gold to partially reimburse depositors who lost savings during the currency crisis.

However, the move faces significant legal and political hurdles. The 1986 law prohibits gold sales, and parliamentary approval would be required to override it. Speaker Nabih Berri recently dismissed the idea as "not feasible," reflecting broader resistance amid upcoming elections. Critics argue that selling gold without systemic reforms risks short-term fixes without addressing corruption or infrastructure decay. Economists have suggested using a small portion of reserves to revive sectors like energy or healthcare, but such proposals remain unactioned.

Meanwhile, Lebanese citizens are independently turning to gold as a hedge against inflation. Gold and silver purchases have surged, with traders reporting high demand despite price volatility. For many, gold symbolizes security in a crisis, rooted in cultural traditions and historical distrust of institutions.

The debate underscores a national dilemma: whether to preserve gold as a legacy asset or deploy it to address immediate needs. With political gridlock and public skepticism persisting, the future of Lebanon's gold remains uncertain, leaving both policymakers and citizens in a precarious wait-and-see stance.

Associated Press and Yahoo Finance, October 2025.