Demand for residential real estate in Lebanon decelerated in the fourth quarter of 2017, as reflected by the results of the Byblos Bank Real Estate Demand Index. The index posted a monthly average of 44.9 points in the fourth quarter of 2017, constituting a decrease of 9.3% from 49.6 points in the third quarter of the year and a decline of 3.3% from 46.5 points in the fourth quarter of 2016. 

Demand for housing in Lebanon is primarily correlated to political stability, consumer confidence and economic activity. However, the resolution of the political crisis that was triggered by the resignation of Prime Minister Saad Hariri in early November could not offset the impact on housing demand of the Lebanese Parliament's ratification in October 2017 of a series of tax increases on consumption, income and profits. In fact, the negative impact of the tax hikes on sentiment has weighed on the willingness of prospective buyers to acquire a residential unit, given that buying a house constitutes one of the most important investment decisions for the Lebanese, and the value of a house is usually the single most important non-financial asset for Lebanese residents. Also, the increase in taxes and fees could negatively affect their disposable income and purchasing power, and could weigh on their already-stretched budgets and increase real estate transaction costs, which, in turn, would hold back demand and delay the recovery in real estate activity. 

In parallel, the full year results show that the Byblos Bank Real Estate Demand Index averaged 47.6 in 2017, constituting an increase of 13.7% from a low base of 41.9 in 2016. But the index's average monthly score for the year was 56.7% below the annual peak of 109.8 points posted in 2010, and remained 22% lower than the index's monthly trend average score of 61 points since the index's inception in July 2007. The index declined in three out of four quarters during the year.

S&P Global Ratings affirmed Lebanon's long- and short-term foreign and local currency sovereign credit ratings at 'B-/B', and maintained its 'stable' outlook on the ratings. It indicated that the 'stable' outlook reflects its expectations that deposit inflows to the financial system will remain sufficient to support the government's borrowing requirements and the country's external deficit over the next 12 months.

The agency pointed out that the government's debt-servicing capacity depends on the financial sector’s willingness and ability to continue to subscribe to government securities. In turn, it noted that this relies mainly on non-resident deposit inflows and on financing from Banque du Liban (BdL). It considered that the government's reliance on the banking sector’s willingness and ability to finance its needs, as well as the divisive domestic political environment and regional tensions, constitute structural weaknesses that have constrained the ratings. It added that the weakening of public institutions has weighed on economic activity and has negatively affected public finances, as reflected by the wide fiscal and current account deficits and the elevated public debt level. 

S&P considered that the ratings are supported by Lebanon's external profile, as the country's liquid external assets, which consist of foreign currency reserves and the assets of the financial sector held abroad, exceed its external debt. It said that the November 2017 political crisis led to about $2.6bn in outflows, but it indicated that such outflows constitute a small share of the banking sector's deposits and were more than compensated by returning inflows, in line with trends during past episodes of political volatility.

The Capital Markets Authority (CMA) published in the Official Gazette Announcement 30 on February 12, 2018 about electronic money or cryptocurrencies. The CMA prohibited licensed financial institutions in Lebanon from issuing or marketing electronic money or cryptocurrencies, as well as from trading cryptocurrencies for their own account or on behalf of other parties. It attributed its decision to several risks related to the use of electronic money, specifically the usage of Bitcoin. First, it indicated that the platforms or networks where the issuance and trading of digital currencies take place are not governed by any laws or regulations. It added that such platforms lack legal frameworks that guarantee cashing back the money that was initially used to buy the cryptocurrency. Second, it noted that digital currencies are not issued nor guaranteed by any central bank, which exposes them to high volatility in prices that can drop to zero. Third, it pointed out that digital currencies can be easily used for criminal activity, such as money laundering and the financing of terrorism. Fourth, it said that incorrect or unauthorized operations that occur from dealing with cryptocurrencies cannot be reversed. Consequently, the CMA cautioned the public from purchasing, owning or using such currencies.