| 19 April 2024, Friday |

Lebanon: Banks to return savings to depositors in installments

Lebanon’s bank depositors reportedly will be allowed to start withdrawing their long-strapped savings starting next week, but rather in installments.

Strapped since the eruption of a sharp financial crisis in 2019, depositors are to be able to make cash withdrawals from their savings in dollars at their real value, without deductions, but in installments.

They will receive specified amounts in cash dollars withdrawals, without a required withdrawal of a parallel amount in local currency at the official exchange rate (15,000 pounds per dollar), as per a previous Central Bank circular that was applied over two years.

Account holders will be able to withdraw between $300 and 400 dollars, setting a withdrawal ceiling of $4,800 per year.

Lebanon’s central bank governor Riad Salameh had amended an earlier decision that set a rate of 15,000 Lebanese pounds for withdrawals from bank deposits denominated in dollars, but which can be accessed largely in the local currency.

The current market rate is set at around 90,000 Lebanese pounds per dollar.

The new development is a qualitative shift in the management of cash liquidity in favor of bank customers who have suffered greatly over the past 43 months.

Account-holders have been unable to freely access their savings since the collapse of the financial sector in 2019.

Lebanon’s economy began to unravel in 2019 following decades of corruption and profligate spending by ruling politicians.

The nearly four-year economic meltdown has cost the local currency roughly 98% of its value, seen GDP contract by 40%, pushed inflation into triple-digits, and drained two-thirds of the central bank’s foreign currency reserves, according to the International Monetary Fund.

The IMF said vested interests in Lebanon have hampered a financial reform program that would have unlocked $3 billion from the lender of last resort.

  • Asharq Al-Awsat