Lebanon mulls tapping $45B central bank gold reserve to ease economic collapse

Lebanon’s economic crisis, now in its seventh year, has brought an unusual potential lifeline into the spotlight: the central bank’s enormous gold reserves. Valued at roughly $45 billion, the reserves have tripled in value since the start of the financial meltdown, fueled by a dramatic rise in global gold prices.

The Financial Times is reporting that bankers and politicians are exploring ways to sell or lease portions of this gold to shore up the nation’s failing financial system, though the topic remains politically sensitive. Many Lebanese see any such move as a bailout for the wealthy rather than a solution for the broader population.

“The gold belongs to the people,” said Ahmed Zaydan, a shopkeeper in Beirut. “Using it to fix the banks is just robbing the rest of us again.”

Since 2019, Lebanon has faced an unprecedented financial collapse: banks restricted access to savings, the government defaulted on debt, and the Lebanese pound lost more than 90% of its value. 

The crisis stems from years of unsustainable banking practices, described by the World Bank as a “Ponzi scheme,” in which banks offered high-interest dollar deposits backed by central bank guarantees.

Lebanon’s central bank reserves, accumulated since the 1940s and 1950s to stabilize the Lebanese pound, are now among the largest in the region. 

While lawmakers are considering the so-called 'financial gap law' to determine who is responsible for repaying depositors, the central bank lacks sufficient liquidity to meet the proposed payouts unless gold is tapped. IMF officials have not opposed the idea, leaving the door open for potential use of the reserves.

Few politicians have publicly advocated selling the gold, fearing public backlash. Industry Minister Joe Issa el-Khoury suggested liquidating around $15 billion to provide bonds for large depositors, insisting the plan would not favor banks. Critics, however, argue that banks would benefit most, using the gold to reduce their obligations while ordinary depositors see little relief.

“This plan mainly shifts wealth to banks and large account holders,” said MP Mark Daou. “The public risks losing its national assets while the financial elite are protected.”