| 22 May 2024, Wednesday |

“Capital Control” draft law has failed after converting depositors’ dollars into Lebanese pounds

The Capital Control draft law has failed in the joint committee session, as most of the Parliamentary Blocs considered that it does not preserve the rights of depositors, demanding a plan and clear figures for the size of losses in the banking sector to be built upon.

Sources to Sawt Beirut International considered that the draft law is an attempt to transfer all deposits from dollars to LBP by setting the cash withdrawal process in pounds only and at the exchange rate of Sayrafa platform. Sources pointed out that this draft law comes in the interest of the state and the banking sector by converting deposits into pounds and thus canceling the losses in dollars, and it also leads to printing the currency indefinitely, and therefore hyper inflation.

Following the failure of the Capital Control draft Law in the joint session of the Parliamentary Finance, Budget, Administration and Justice Committees, a report was issued by the global rating agency (Moody’s) revealing that about $9.5 billion in bank deposits have been released in the past two years.

It is believed that most of the transfers belong to political and economic influencers, and nearly half of them were transferred during the first weeks of the outbreak of the monetary and financial crises.

Moody’s said that “despite the unofficial restrictions on transfers at the end of 2019, about $5.4 billion of non-resident deposits in foreign currency have been transferred outside the country between January 2020 and September 2021, with this number rising to $9.5 billion if 2019 is included.”

To shed light on this topic, the economist Antoine Farah joins us via phone

Federations and unions of the land transport sector announced a general strike next Thursday, after the government disavowed its promise to implement a plan to support the land transport sector early this month.

  • Sawt Beirut International