- Advertising Agencies
- Architects

- Banks

- Car Dealers
- Car Rental
- Casinos
- Commerce
- Consulting
- Cosmetology
- Craft

- Data Processing &
Computer Systems
- Decoration &

- Editing
- Elementary Schools
- Engineering &
- Environment / Waste
Management Services
- Express Delivery

- Fashion
- Financial Services
- Food & Beverage
- Furnished Apartments

- Health / Beauty
- Higher & Vocational
- Home Appliances
- Hotels 3
- Hotels 4(A)
- Hotels 4(B)
- Hotels 5
- Hotel & Restaurant

- Industry
- Insurance
- Interior Design /
- Internet

- Jewelleries

- Lighting
- Luxury

- Media
- Music

- Office Equipment /
- Oriental Carpets
- Outside Decoration

- Printing
- Promotional Materials

- Real Estate
- Recruitment
- Restaurants

- Sanitary Wares
- Security
- Services
- Sweets

- Taxi
- Telecommunication &
Mobile Phones
- Transport
- Travel Agencies
- Technical Studies

- Watches
- Water Treatment



Back to archives Back to news
French Version

T-bill rates take another plunge - Move reflects 'positive mood' in market

T-bill rates take another plunge - Move reflects 'positive mood' in market - The Daily star

For the fourth consecutive week, the Central Bank reduced the yields on all types of Treasury bills during Monday's auction, reflecting the growing confidence in fiscal measures.

The yields on two-year T-bills fell to an all-time low of 9.94 percent after last week's 11.22 percent. The two-year T-bills were traded at more than 16 percent in October of this year.
The yields on the 12-month, six-month and three-month T-bills also fell to 9.94 percent, 10.05 percent and 8.56 percent respectively. The Central Bank was able to raise LL410.5 billion during Monday's auction.

Bankers said the market atmosphere improved after Prime Minister Rafik Hariri's government secured pledges of $4.4 billion in soft loans from the meeting of donor countries in Paris, in November. The government will use $3.1 billion of these pledges to obtain loans with low interest and longer maturity. Finance Minister Fouad Siniora does not expect the interest on the Paris loans to exceed 5 percent. The government pays around 12 percent on its massive $30 billion debt.

In addition, the commercial banks agreed to buy $4 billion in T-bills or eurobonds at zero interest. This measure will enable the government to reduce debt servicing by more than $400 million a year. Furthermore, the Central Bank plans to issue $4 billion in T-bills and bonds at very low interest rates.

Economists say that if all sides keep their promises, debt servicing, which is expected to reach more than $3 billion at the end of this year, will fall by more than $1.2 billion a year. "The Central Bank is following the market. Now the mood of the market is positive and therefore we have to act accordingly," said the head of financial operations at the Central Bank, Youssef Khalil. He added that despite the drop in interest rates, the demand for T-bills remained high because of positive expectations.

Khalil said he expected yields on six-month and three-month T-bills to fall further in the future, but refused to predict how far. "This all depends on a number of factors such as the government measures to reduce the deficit," he added. Bankers said depositors are also shifting to Lebanese pounds following "Paris II."

Banks in general are selling the two-year T-bills at no more than 8.5 percent. The vice-chairman of BLOM, Saad Azhari, said he had noticed a big shift in the mood of depositors and investors over the past few weeks. "The ratio of Lebanese pound deposits are increasing," Azhari said, adding that depositors have stronger faith in their local currencies. People are accepting lower returns on their deposits because they are becoming more confident in the economy," Azhari said. "The interest rates on deposits in Lebanese banks are still higher than other countries around the world. The private sector will start borrowing from banks at low interest rates in the future after the government has eased its borrowing from these banks."

Adviser to the chairman of Fransabank Joe Sarrouh said further drops in interest rates all depend on how far the government's reform program goes. "As long as the government is pressing with its program, the market will respond in a positive manner," Sarrouh said.

Beirut 23-12-2002
Osama Habib
The Daily Star

Business News
Business Forum
Business Opportunities
Fairs & Exhibitions
Useful Addresses
Currency Exchange Rates
Some Marks
To see in Lebanon
Media of 1stlebanon
Impact of 1stlebanon
Add your company
Press Book
Flowers delivery Lebanon
Flowers delivery Dubai
Oriental food specialty
Lebanese wine
Real estate agency Beirut
Hotel Hamra-Beirut
Car rental
Rent a car lebanon
Reservation for your travel in Lebanon
Association des français de l'étranger
-section Liban
Diamond jewelry Lebanon
Jewelry manufacturer Lebanon
Jewelry watches-Swiss made watches
Diamond Swiss watches
Modern and comtemporary jewelry
Byzantine & Phoenician jewelry
Jewelry creation
Oriental, classical and traditional decoration
Hand made furniture
Construction management Lebanon
Projects development
Shoes manufacturer and distributor Lebanon
Sole agent of Philips & Whirlpool in Lebanon
Web development
Web marketing
Printing press services
Paper products
Insurance company Lebanon
Insurance Lebanon
Rent villas France
Hotels all over Syria
Hotel management company
University Lebanon
Arab Media News