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sero wroteHello

I noticed many banks are raising their interest rates on saving accounts, some are giving 16% over 5 years on LBP.
And its not on a huge amount of money (A bank offered 15% annual rate over 5 years for 30k LBP (and 10% over 1 year on same amount).

What do you think about these rates?
Are we close to an economic Collapse?
In this case would it be clever to wait and see if the rates rise even higher before putting money in a saving account?
@sero, could you please mention or DM me the name ofnthe banks proposing these interest rates? I might block a bit for a year or so
Draguen wrote@sero, could you please mention or DM me the name ofnthe banks proposing these interest rates? I might block a bit for a year or so
Done!
joe2k17 wrotehow wise it is now to block money in LBP for 5 years and the current economic situation is so bad ?
I have a loan in LBP with maturity 20 years.
The way I see it, I can put LBP money in a saving account to pay part of the loan's fees.
In this way even if an economic collapse took place, the saving account money will still pay for the loan money.
samer wrote

I've been thinking about this and it's hard for me to completely grasp the situation. I hope other members that have deeper knowledge about economics will step in to enlighten us.

Here's what I see:

- Sharp rise of interest rates as discussed in this topic
- Lebanese gov bonds trading at a discount (95 cents on the dollar for short-medium term), which hints that the market thinks the government will default on its debt obligations
- Nominal debt at 152% of GDP. Third-highest in the world.
- No government formation in sight means no budget for 2019 and unclear handling of outstanding debt
- Every business-owner I know complaining that "business is slow"
- Housing loans on hold, real-estate dip

Exactly!
I can't find a single positive explanation for the current economy to get better

Some say CEDRE (this is the 3rd one if I'm not mistaken, what did we see from the first 2?), others say when war ends in Syria Lebanon will boom (but probably the Syrian gov will only allow a few Lebanese ally business men to benefit from this), others say president Aoun will not accept an economic collapse to take place during his ruling (I think its not his call), others say we have Riad Salemeh (the guy is smart, but won't be able to handle this due to the amount of corruption we have), others say we have gas/petrol now (lol)....
sero wrote
Exactly!
I can't find a single positive explanation for the current economy to get better

Some say CEDRE (this is the 3rd one if I'm not mistaken, what did we see from the first 2?), others say when war ends in Syria Lebanon will boom (but probably the Syrian gov will only allow a few Lebanese ally business men to benefit from this), others say president Aoun will not accept an economic collapse to take place during his ruling (I think its not his call), others say we have Riad Salemeh (the guy is smart, but won't be able to handle this due to the amount of corruption we have), others say we have gas/petrol now (lol)....

Cedre is different from other previous conferences because due to the miserable failures of Paris I and Paris II, the money will only be unlocked if the reforms are implemented, instead of before.

basically no reforms, no money.
joe2k17 wroteHello Sero,
Thanks for raising this I also have the same question, how wise it is now to block money in LBP for 5 years and the current economic situation is so bad ?
I am not sure if it is even better to put your money in USD and get lower interest and stay safe ?
Or may be block them in LBP/Monthly and Monitor to have a little higher rate and a small chance to convert them to USD in case of any economy collapse.
Let see what other member think it s best to do at the moment ?
15% yearly (on 5 years CDs) return is extremely high and to make a decision you have to put it under the umbrella of high-risk/high reward. To be sure I am not understating: this interest is soo good that if you have 80k only you can make the monthly average salary of 1k/month in Lebanon. Being an investment/finance fan, this is a very high return and there is no other legal way to make this sum in a small capital.
samer wroteI've been thinking about this and it's hard for me to completely grasp the situation. I hope other members that have deeper knowledge about economics will step in to enlighten us.

Here's what I see:

- Sharp rise of interest rates as discussed in this topic
- Lebanese gov bonds trading at a discount (95 cents on the dollar for short-medium term), which hints that the market thinks the government will default on its debt obligations
- Nominal debt at 152% of GDP. Third-highest in the world.
- No government formation in sight means no budget for 2019 and unclear handling of outstanding debt
- Every business-owner I know complaining that "business is slow"
- Housing loans on hold, real-estate dip
No one on earth can know how close we are to an economic collapse, this is like my old neighbor who was diagnosed with terminal cancer and had 6 months to live, this was 15 years ago and he is still living his normal life without undergoing any treatment. The doctors who predicted his death are as highly experienced as the economists who are predicting the collapse since years ago. The conclusion: No one ever knows the maximum stress any system can take (financial or biological or...), this is not science this is merely the statistical model being put into reasoning, this is why those kind of predictions are never accurate. I can tell that only people in high power know about any coming collapse but only before a short period of time and to prove it to you: if you track down major economic breakdowns in any economy/stock in the world in the last 50 years you can see that billionaires have lost big money to this. Those people hire professionals to do their study but when the big wave comes everyone goes down.

Everyone has to make his own decision, hooray for the people with no cash for the piece of mind they have now. But for the people having cash in Lebanon, I am not sure of the alternatives they have, not everyone considers it convenient to put their money in a bank outside the country. Buy small apartments, rent them and keep some money aside for emergencies. Any ideas guys?
Thank you for your input Guitaret. I highly appreciate the contribution.
No one ever knows the maximum stress any system can take (financial or biological or...), this is not science this is merely the statistical model being put into reasoning, this is why those kind of predictions are never accurate
Fully agreed. I think this statement is key, and I wonder whether one's portfolio should be structured with this statement in mind. Make sure that if (or when) the banks go under, you're not bankrupt.
18 days later
Update

A bank which previously offered 15% for 30k LBP over 5 years, just called to inform me that they increased the rate to 16%!
and 11.5% over 1 year.

I'm going to wait till beginning 2019 to see how things goes.
sero wroteUpdate

A bank which previously offered 15% for 30k LBP over 5 years, just called to inform me that they increased the rate to 16%!
and 11.5% over 1 year.

I'm going to wait till beginning 2019 to see how things goes.
Why the specific amount of 30k LBP.
I don't understand.
What if less than 30k or more than 30k?
AVOlio wroteWhy the specific amount of 30k LBP.
I don't understand.
What if less than 30k or more than 30k?
30k LBP is the minimum amount to benefit from the interest rate (most banks set it to 30k, it surely can be more, but not less)
sero wrote
A bank which previously offered 15% for 30k LBP over 5 years, just called to inform me that they increased the rate to 16%!
and 11.5% over 1 year.
.
Bank Audi gave me the same offer but the weird part is that the money needed to be converted from USD to LBP in order to be qualified for this plan.
Guitaret wroteBank Audi gave me the same offer but the weird part is that the money needed to be converted from USD to LBP in order to be qualified for this plan.
.
Yes, this is exactly what SGBL informed me also (USD to LBP)
Economically, what does this mean?
sero wrote
Guitaret wroteBank Audi gave me the same offer but the weird part is that the money needed to be converted from USD to LBP in order to be qualified for this plan.
.
Yes, this is exactly what SGBL informed me also (USD to LBP)
Economically, what does this mean?
They want to get people to buy LBP instead of choosing the other safe options of USD. They think they can convince people to sell their USD => more USD in the market/banks/central bank (frozen) => Central bank has more foreign currencies => LBP is safer.
If all people panic & start buying USD (or other stocks, or transfer money outside) the LBP will collapse for sure.

But I did not get what I need to do to get the deal, should I make a transfer of 20k $ so they can do the exchange themselves?
7 months later
Hello Community,

Any idea what are the current bank interest on LBP and USD and which Banks are giving the best interests at the moment ? are they still giving 15% and 16% like before for converting USD to LBP?

BR//
joe2k17 wroteHello Community,

Any idea what are the current bank interest on LBP and USD and which Banks are giving the best interests at the moment ? are they still giving 15% and 16% like before for converting USD to LBP?

BR//
Definitely not 15-16% anymore. The current rate is 6-6.5 on USD for monthly. around 8.5% for yearly. As for LBP it's about 2 points higher. That's for amounts <100,000$. Avoid Audi, they have the lowest rates (like half these numbers) and they don't care. All other banks will try to match competing offers if they see you did you due diligence.
joe2k17 wroteHello Community,

Any idea what are the current bank interest on LBP and USD and which Banks are giving the best interests at the moment ? are they still giving 15% and 16% like before for converting USD to LBP?

BR//
2 Months ago I went to SGBL and they said they are giving now 12.5% (for the 5 years term). I had tiny regrets about missing the 15% chance. But I don't know about the ones that got 15%, are the banks still paying that or not?
Another point/question worth mentioning:

Some people said that they got affected in their house loans (negatively). A friend told me he is now paying extra 250$/month on a house loan he took 4 years ago. Did this happen with any of you guys?
Guitaret wroteAnother point/question worth mentioning:

Some people said that they got affected in their house loans (negatively). A friend told me he is now paying extra 250$/month on a house loan he took 4 years ago. Did this happen with any of you guys?
I have iskan loan and none of that happened. Your friend must have a private bank loan or something.
I have a BDL subsidized housing loan since ~3 years and my monthly payment is still the same.
A couple of people i know had their monthly payment increased (iskan and BDL).

The loan's interest rate depends on the Lebanese Treasury Bills (LTB) rate. LTB rate got higher this year hence payment increased, you can check the value here: http://www.bdl.gov.lb/statistics/table.php?name=t5271-3

Depending on when you took the loan, your interest rate will get higher, its just a matter of time.
sero wroteI have a BDL subsidized housing loan since ~3 years and my monthly payment is still the same.
A couple of people i know had their monthly payment increased (iskan and BDL).

The loan's interest rate depends on the Lebanese Treasury Bills (LTB) rate. LTB rate got higher this year hence payment increased, you can check the value here: http://www.bdl.gov.lb/statistics/table.php?name=t5271-3

Depending on when you took the loan, your interest rate will get higher, its just a matter of time.

Exactly. My bank called me few weeks ago. I have to pay extra $350 per month ( loan above $450k ).

The thing is, it doesn't matter when you took the loan, if it's a BDL subsidized, they will contact you soon. It just depends on the month you took it.

Every year, they recalculate ( not sure about the financial term for this ) the interest rates and charges. During the last 25 years, rates were going down on a yearly basis.

It's probably the first time that housing loan interest rates go up.
Guitaret wrote
joe2k17 wroteHello Community,

Any idea what are the current bank interest on LBP and USD and which Banks are giving the best interests at the moment ? are they still giving 15% and 16% like before for converting USD to LBP?

BR//
2 Months ago I went to SGBL and they said they are giving now 12.5% (for the 5 years term). I had tiny regrets about missing the 15% chance. But I don't know about the ones that got 15%, are the banks still paying that or not?

I know a bank that offered %17.5 interest rates on LBP for amounts > 500 m LBP. Since late January, no bank is allowed to offer more than 12% on LBP and 8% on USD ( according to my bank and to the rules set by BDL )
Drifting a bit off-topic but I need an advice from people who took a house loan.
I bought a property recently and I am almost there in completing its price in full (90%) but I did not take a loan from the bank yet: I paid all the cash I have & I am paying the remaining on monthly installments.

The thing is that I am currently cashless and as you know the house needs soo much work & money for it to be called home (refurb work, furniture, curtains, carpets, custom work, smart appliances, outside garden work, heating & cooling...). This is not a small sum.

My question: Since it is not mine completely yet, I still have a chance to take Iskan (when it is offered again). This is a 30 years loan (not to be taken lightly I know) but since it is a low interest one, I am able to finish the house to my liking and still have ~100k for an investment of my choice after that.
Friends are telling me that paying ~1k USD every month forever (or 30 years) will break my back as it did to theirs. They advised to only take a personal loan to cover the basics of the house and henceforward I can work it up in what remains from my salary each month. What I only like about this idea is the fact that the house will not be mortgaged and so I can sell it easier if I ever needed to, but I dislike the fact that the loan is of a very high interest (yes personal loans are crazy now: ~20%) and I won't be able to do the house properly: hire an architect, terrace, jacuzzi, security system, and all that jazz.

Please advise.