Diaspora transfers: what risks to the book?

A long-term decline in diaspora transfers would weaken much more than just the price of the pound. It would reduce family income, the supply of dollars and the ability of the Bank of Lebanon to rebuild its reserves. However, the concerns raised in the market do not yet make it possible to measure a decline in autumn 2026. The 2019 precedent helps to understand risk, provided that family remittances are distinguished from bank capital and nominal stability from real purchasing power.

As of 14 November 2026, the question must therefore be asked as a vulnerability analysis, not as the announcement of an imminent rupture. Less frequent or less frequent transfers are signals to be documented. They become a national trend only with comparable data over several months, covering the different channels and their possible movements.

Diaspora transfers: what is established

The Bank of Lebanon’s A42 series, dedicated to workers’ shipments, allows a homogeneous annual comparison. By adding up its twelve monthly observations, inflows reached $6.245 billion in 2025, up from $6.757 billion in 2024. The calculated decrease is 7.57%, or approximately $511 million. These are gross entries in this series, not the balance after shipments to abroad.

This decrease concerns 2025. The last observation in the series consulted is December 2025. It therefore does not alone confirm a recent acceleration of the decline. The diagnosis on November 2026 remains distinct from this historical comparison.

The perimeter is as important as the number. The transactions registered by the transfer companies do not automatically represent all shipments from the diaspora. A change in provider or channel can reduce a series without reducing the resources received by households in the same proportion. It is also difficult to measure the amount of money provided on a trip and some operations abroad.

An annual amount does not provide information on the frequency of payments. In order to check whether expatriates would space their shipments, it would be necessary to know the number of transactions, their average amount and their evolution by country of origin. These dimensions cannot be inferred from an isolated testimony or from the total received.

A dollar received does not automatically enter the BDL

The first effect of a transfer is private. A family receives resources that it can consume, conserve or allocate to a debt. If it exchanges its dollars for books, it directly feeds the currency supply. If it pays its rent in dollars, the currency circulates between residents. If it purchases an imported product, a party can then be used for payment from an outside supplier.

These routes explain why a transferred dollar does not necessarily correspond to a dollar of additional reserves. To increase its assets, BDL must acquire foreign currency or receive other external resources. An amount retained in a private portfolio is not included in its reserves.

A sustained drop in shipments can therefore be achieved through several channels. Households sell less dollars to the cabbies. Traders collect less revenue. Importers find less currency in the private circuit. The central bank may find it more difficult to buy dollars without putting pressure on their prices.

However, transmission is not mechanical. Higher tourism revenues, exports or other financing can offset some of the shortfall. Conversely, a simultaneous shock on tourism and transfers amplifies the constraint. The fall in consumption can also reduce imports at the price of an economic slowdown.

Nominal parity and real rate do not say the same thing

The nominal parity is the number of books exchanged for one dollar. A stable price around 89 500 can facilitate contracts and payments. It does not guarantee price or standard of living stability.

The real exchange rate corrects the nominal price of relative prices between economies. If Lebanese prices rise faster than those of the partners, with nominal prices unchanged, Lebanese goods and services become relatively more expensive. It’s a real appreciation. The actual effective rate brings together several bilateral relations, weighted according to trade. It does not designate another course to buy dollars.

« Real parity » should therefore not be confused with an assumed equilibrium rate. Determining a sustainable price would require, among other things, an assessment of productivity, trade, financing and external commitments. An increase in the price index is not enough to announce that the dollar should be worth a specific amount.

The purchasing power of transfers is still a third issue. A household can receive exactly the same amount in dollars and buy less property in Lebanon. Its actual loss does not prove that the nominal transfer has decreased. Conversely, a decrease in the amount received reduces its budget even when prices and prices remain unchanged.

If both movements combine, the household is under double pressure: less dollars received and less possible purchases with each dollar. The problem is then visible in food, school or medical expenditure before appearing on the table of a foreign exchange office.

2019: stopping funding, not just family help

The Lebanese precedent calls not to date all the difficulties of October 2019. As early as 2018, the IMF has seen the reversal of non-resident deposits and other inflows. The loss of confidence and subsequent outflows of capital exacerbated the liquidity shortage. The Bank’s exposure to the BDL made it impossible to normally repay foreign currency deposits. The sovereign default of March 2020 then aggravated a crisis that had already begun.

Prior to the breakup, the system depended on the renewal of funding attracted particularly by high remuneration. A deposit was a debt to its holder, not a national income. The funds could be used to finance the State or operations of the central bank, while remaining payable by the depositors.

When the new contributions are no longer sufficient to cover needs and outputs, this assembly encounters a payment constraint. The promised interest does not bring the necessary dollars to honour them. Increasing remuneration may delay some withdrawals, but increases future liabilities if the funded assets do not generate the corresponding revenues.

The bank freeze then changed the very nature of the money available. A dollar balance in an old account no longer offered the same opportunities as a freely transferable dollar. Restrictions and conversions deferred losses on applicants. The decline in currency has hit income in pounds.

The relevant analogy therefore concerns dependence on external inputs and confidence. It cannot be said that any reduction in family transfers would automatically take place in 2019. Today, a much larger part of transactions are based on directly usable dollars, outside of traditional bank credit. The shock can first affect income and activity rather than take the form of a new rush on the same deposits.

Reserves may deteriorate before the price

For the central bank, foreign exchange scarcity may first mean less purchases. Reserves then stop growing without the BDL necessarily selling more dollars to defend the book. If its disbursements continue and exceed revenues, available assets decline.

The last balance sheet at the end of October, taken from a bank economic note of 4 November, puts the foreign currency reserve assets at around $11.47 billion. It indicates a decrease of about 430 million since the beginning of 2026, despite a small increase in the second half of October. This balance sheet does not measure the effects of diaspora transfers alone.

The World Bank was already describing a narrower availability of currencies in October. It noted a decrease in reserves of $458 million between mid-February and mid-August 2026, while the restriction of liquidity in books supported the exchange. These dates and perimeters must remain attached to the figures: it is not a daily cash register.

Gross reserves also do not constitute net wealth free of any obligation. A distinction must be made between liquid assets, investments, foreign currency liabilities and resources that can be truly mobilized. A valuation change may change an accounting inventory without corresponding to an entry or exit of dollars.

Gold requires the same caution. An increase in its value improves the value of an asset; it does not automatically provide the currency required for current payments. Adding without distinction gold and cash would give a misleading picture of the immediate response capacity.

It would be equally misleading to divide the stock displayed by a recent drop in transfers to announce a date of exhaustion. Not all shipments go through the BDL, not all disbursements defend the exchange and other flows evolve. Such a forecast would require a real cash flow scenario, not a rule of three.

What BDL can amortize, and what it can’t create

The first answer is to avoid the creation of books adding a dollar demand to the lack of currency. Monetary financing of public expenditure can increase this pressure. Budgetary coordination therefore counts as much as foreign exchange operations, especially when tax revenues slow down.

The collection of taxes in books and the retention of public balances at the central bank withdraw from market liquidity. On the other hand, their expenses are back in circulation. The BDL must take these movements into account in assessing the demand for currency, without confusing a seasonal cash flow effect with a lasting improvement.

It can also sell dollars to absorb a temporary shock. This intervention exchanges a limited resource for time. It does not replace long-term external revenues. The key issue is the duration of the shock and the cost of defending the course.

Overly hardening liquidity involves another bill. Payments become more difficult, more expensive inventory financing and activity can slow down. A nominally stable currency obtained by dewatering all transactions is not enough to protect the economy.

Transparency would be a complementary instrument: regularly publish foreign currency purchases and sales, liquid assets, their valuation variations and payment obligations. Consistent data distinguish a transient tension from a persistent imbalance. They also reduce the space left to rumors.

Finally, rebuilding confidence requires credible treatment of bank losses and depositor rights. In its communiqué of 18 September 2026, the IMF requested that repayments remain compatible with bank viability and public sustainability. Promising more without identified resources would move the problem rather than solve it.

The central bank alone cannot create exports, restore tourism or guarantee the income of expatriates. Sustainable external financing and the return of a viable banking system would widen its margins. Recycling costly commitments to temporarily attract dollars would, on the contrary, restore familiar vulnerability.

Pressure is passed on to the entire economy

For recipient households, adjustment begins with carry-forward expenditure. But when transfers finance basic needs, the margin narrows rapidly. A family may defer repair, reduce purchases or solicit family members. These decisions affect the incomes of other residents.

Trades and services are then reduced. They reduce their orders, hours of work or investments. Companies selling to externally assisted households are particularly vulnerable. The effect is spread even to employees who do not receive any transfer.

The decline in purchases can reduce imports and the need for dollars. This rebalancing is not necessarily a productive success: it can result from impoverishment. A reduction in the external deficit resulting from cessation of care, equipment or inputs does not automatically prepare for future growth.

Public finances are also involved. Less consumption and imports can reduce tax revenues, while social needs increase. If the state responds with a monetary issue with no corresponding resources, the fiscal difficulty joins the pressure on the exchange rate.

A nominal depreciation would add a redistribution. Fixed income in books would lose value against dollar prices. Imported inputs would cost more in national currency. Exporting companies could benefit from some lower local costs, but only if these costs are not immediately indexed and can be produced.

Not all dollar prices would go up automatically. A weakened demand may reduce margins or rents; imported products remain sensitive to international prices and financing. Dollarization protects certain units of account, not the income of all actors.

Indicators to identify a changeover

The first check must cover the transfers themselves: comparable periods, gross and net entries, number of transactions, average amount, country of departure and channels used. A comparison with the same month of the previous year limits the errors related to holidays and holidays.

The second concerns all currencies: tourism, exports, imports, financing and capital movements. Current transfers are already part of the current account. They should not be added a second time as financing for the deficit remaining after they are taken into account.

The third concerns the monetary response: currency purchases, disbursements, liquidity in books and reserve assets actually available. The combination of lower sustainable transfers, high external needs and declining reserves would be more significant than a single isolated indicator. The next data should indicate whether the concerns expressed reflect a change in channel, a seasonal slowdown or a continuing contraction in resources received.