Lebanon’s central bank said late on Wednesday it would ask the State Council to review its decision to prevent depositors from withdrawing money from their dollar accounts at the fixed exchange rate of 3,900 Lebanese pounds to the dollar, after the move sparked protests.
Night protests erupted in Beirut, Tripoli and other Lebanese regions, in rejection of a banking decision that places additional restrictions on citizens’ withdrawals from their accounts deposited in US dollars. Read also The historical collapse of the Lebanese pound.. 5 questions and answers How did the dollar crisis and the collapse of the lira affect work inside Lebanon’s ports?The price of the lira between banks and the black market.. confusion exacerbates the suffering of the Lebanese people Lebanon.. The collapse of the banking sector and the continued deterioration of the living situation
The National News Agency stated that demonstrators in Beirut blocked roads with burning tires in response to the bank’s circular issued yesterday morning, Wednesday, by a decision of the State Shura Council.
People lined up in front of ATMs yesterday to withdraw at a rate of 3900 pounds to the dollar, before the decision took effect on Thursday.
Anatolia reported that a number of young men gathered at the Ring intersection in central Beirut, and cut off the main road for some time.
Likewise, protesters for the same reason blocked the main roads in the areas of Antelias and Zouk, north of Beirut, and those roads link the capital with the northern regions of the country.
In Tripoli (north), demonstrators blocked the road in front of the central bank building in the city, and set fire to protest the decision. The protesters also denounced the living difficulties they are experiencing as a result of the economic crisis.
Yesterday, Wednesday, the Central Bank issued a decision asking banks operating in Lebanon to suspend depositors’ withdrawals from their dollar account funds at the rate of 3900 Lebanese pounds to the dollar.
The bank based its request on a (initial) preparatory decision issued by the State Council, which stipulates that payment to dollar account holders must be made in the deposit currency, i.e. in dollars, and not in Lebanese pounds, at the exchange rate of 3900 pounds to the dollar.
Lebanese banks set restrictions on withdrawals in dollars, and allow withdrawals in Lebanese pounds only, and according to an exchange rate of 3900 pounds, based on a previous decision of the Banque du Liban, while the exchange rate of the dollar in the parallel market is currently about 13 thousand pounds, and this means that depositors lose about 70 % of their money value.
However, the Central Bank, after requesting to stop the withdrawals according to the exchange rate of 3900 pounds to the dollar, did not specify in which currency the deposits would be paid to their owners, and according to what exchange rate if it would be in Lebanese pounds.
This raised the fears of depositors in foreign currencies that withdrawing their money would be available only according to the exchange rate of 1507 liras, which is the official exchange rate at the Central Bank, while the dollar exchange rate in the parallel market is about 13,000 liras, which means an increase in their loss to about 88% of value of their money.
The Lebanese Depositors Association supported the decision of the State Council, declaring its refusal to pay withdrawals from dollar deposits in Lebanese pounds, whether according to the exchange rate of 1515 pounds or 3900 pounds.
And she said in a statement via her Twitter account that the deposit is paid in the same currency as the deposit itself, and not in Lebanese pounds.
A year and a half ago, a severe economic crisis afflicted Lebanon, which led to an unprecedented financial collapse, and a scarcity of basic materials such as medicine and fuel, in addition to a record high price of food commodities.
In the past months, Lebanon witnessed a series of protests denouncing the financial collapse and the reality of living, sometimes interspersed with acts of violence and the smashing of the facades of some banks.