On 03/01/2020, the Beirut Reference Rate (BRR) on USD was amended to 9.35% as of the beginning of January 2020. On 17/01/2020, the Beirut Reference Rate (BRR) on USD was revised to 8.50% as of the beginning of January 2020. On 15/02/2020, the Beirut Reference Rate (BRR) on USD was revised to 6.75%. On 15/04/2020, the Beirut Reference Rate (BRR) on USD was revised to 5.75%. On 12/06/2020, the Beirut Reference Rate (BRR) on USD was revised to 4.53%. The gradual decrease in the BRR rate reflects the Banque du Liban decision to set caps on credit interests on the new and renewed deposits. On 30/06/2020, ABL recommended to banks to cap the lending rates at the Beirut Reference Rate plus 2% to be applied as of July 2020 though the end of 2020.

Citing the increasing discrepancy between the international rates and the situation of risks in Beirut market and the unrealistic continuity of the adoption of LIBOR – i.e. the lending rate between the banks in the London market – as a benchmark for local interests, the Board of Directors of ABL adopted, in its meeting, held on March 24, 2009, a methodology to calculate the Beirut Cost Rate (BCR). The banks started to implement it, starting the beginning of April 2009, as a reference rate in the fiduciary contract instead of LIBOR. This rate allows the banks, after the addition of the cost of the fiduciary process and the profitability of the banks, to set the best debtor interest rate. The ABL, in the calculation of this reference rate, relied on the average cost of term deposits in dollars, in addition to the average operational cost in the Lebanese banking sector, in proportion to the overall deposits which are weighed by credits in dollars to the overall credits.

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