The Bank’s foreign currency reserves rose to $30 billion at the end of March, an increase of six percent compared to the end of 2009.

Total gold reserves at the Central Bank increased to $10.23 billion, up 20 percent on yearly basis and nearly by two percent from the end of 2009.

The large foreign and gold reserves held by the Central Bank, in addition to the sustained improvement in external liquidity, the strengthened ability of the resilient banking system to finance fiscal deficits, and the amelioration of the domestic political situation are all factors  that drove international rating agency-Moody’s to improve the country’s ratings. 

It upgraded the government bond ratings to B1 from B2.  It also improved the ceiling for foreign currency bank deposits to B1 from B2 and the ceiling for foreign currency bonds to Ba3 from B1, and kept the local currency country ceilings unchanged at Ba1.

Despite the improved rankings, Moody's said that the country still faces significant political and economic vulnerabilities, including the wide twin deficits, a very high public debt overhang, a tense domestic political environment, and the persistent threat of an escalation with Israel.

It said that the government ratings will remain bound in the B rating category in the absence of significant further improvement in government finances which lessens dependence on domestic bank funding and a reduction in political event risk.

The last rating action on Lebanon was implemented by Moody’s on 18 December 2009, when it changed the outlook on the country’s sovereign ratings to positive from stable.