Lebanese central bank sees 'positive signs' in budget, power reforms

BEIRUT (Reuters) - Reforms in the Lebanese state budget and power sector are "positive signs" and financial markets and the Lebanese pound remain stable, central bank governor Riad Salameh said on Monday after meeting President Michel Aoun.

Salameh also said the central bank was "keen to follow up on current efforts with a focus on respect for Lebanese law and global financial rules that do not permit any obligatory measures on banks", without elaborating.

"I found the president completely understanding of this approach," Salameh added.

The 2019 draft budget cuts the deficit to 7.5% of GDP from 11.5% in 2018. Lebanon has one of the heaviest public debt burdens in the world, at around 150% of GDP.

The budget includes a government plan to cut some $660 million from the debt servicing bill by issuing treasury bonds at 1% interest rate to the Lebanese banking sector, the finance minister has said.

The government is expected to seal its discussions on the budget on Monday in a session to be chaired by Aoun, after finalising the plan at cabinet level on Friday. It will then be referred to parliament.

The pound has been pegged against the dollar at its current level for more than two decades.

(Writing by Tom Perry)