ABL recommends reducing lending rates

Beirut Reference Rate: 2 basis points reduction on lending in lira, 7 in dollar

June 23, 2011- The Association of Banks in Lebanon (ABL) urged banks to lower the Beirut Reference Rate on lending in the local currency and advocated them to lower the rate on lending in dollar.

According to a recommendation issued on June 14, 2011, the ABL’s Board of Directors urged local banks to lower the Beirut Reference Rate on lending in lira (BRR/LBP) by two basis points from 7.21 percent to 7.19 percent. ABL recommends that this change becomes effective as of July 1, 2011.

The ABL’s Board of Directors advocated banks to lower as well the Beirut Reference Rate on lending in U.S. Dollars (BRR/USD) by 7 basis points from 4.79 percent to 4.72 percent.

The above mentioned rates are not be confused with the Beirut Prime Lending Rate (BPLR), yet constitute the basis for the calculation of the BPLR after factoring in liquidity cost, credit risk cost and some profitability factor.