| 30 May 2024, Thursday |

Protecting small depositors is a pledge that will not come true

The President of the Republic Michel Aoun presented with a delegation from the LAZARD International Consulting Company, the necessity of completing their advisory mission to the state in preparing for negotiations with the International Monetary Fund for economy’s recovery.

Aoun stressed during the meeting the importance of reviewing the economic recovery plan, that was set by the previous government, due to the changes that occurred in numbers for more than a year until today, so that Lebanon’s position will be strong during the negotiations.”

The delegation members stressed the importance of unifying numbers, implementing reforms, and setting a plan to restructure the banking sector.

The title of the government’s recovery plan, which will be hold to the IMF is “Protecting small depositors and returning their money without any haircuts. But do the small depositors exist yet in order to protect them? Until the new government agrees on a recovery plan, discusses it with IMF and implement it, the rest of the money of small depositors that Prime Minister Najib Mikati identified, as not exceeding $50,000, deposits will evaporate as a result of the disguised haircut imposed on them since. These practices have pushed small depositors to withdraw their money at the exchange rate of 3,900 LBP, which is equal to 85 percent deduction, according to the exchange rate of the dollar in the parallel market.

Circulars 151 and 158 have eliminated the rest of the small depositors, thus disregarding the need to protect them after their money ran out and their bank accounts were closed. Only a small percentage of small depositors did not withdraw their money, either by circular 151 on the exchange rate of 3,900 LBP, or through circular 158, that means $400 in cash and its equivalent in LBP at the exchange rate of 12,000 LBP per month, or by selling it through bank checks for cash dollars.

Consequently, the bank accounts are restricted to major depositors, whose losses in the banking sector will be distributed between them, the Central Bank, and the banks. While extending the deadline for benefiting from circular 158 until the end of next month, and allowed beneficiaries to withdraw their dollars from other bank accounts, at the same time, at the exchange rate of 3,900 LBP, to raise their purchasing power, or rather, to reduce the size of bank deposits in dollars, and cut their losses.

Prime Minister Najib Mikati, Minister of Social Affairs Hector Hajjar and Minister of Economy and Trade Amin Salam signed “a decision to define the mechanism and criteria for implementing the law related to the electronic ration card and to open an exceptional additional appropriation for its financing.”

Al-Hajjar explained that there are technical stages that must be completed in order to start registering on the platform. A press conference will be held at a later stage to explain the details.

Salam confirmed that financing the card is under discussion and is in the custody of the Ministry of Finance and the Central. He pointed out that the government tends to pay the ration card according to the exchange rate of Sayrafa platform, because the Lebanese state can only pay within the framework of the official price, not the black market price.

  • Sawt Beirut International