Central Bank of Lebanon carries out limited withdrawals amid financial crisis
(MENAFN) In response to the ongoing economic crisis, the Central bank of Lebanon has issued a circular permitting depositors to withdraw a meager USD150 per month from accounts opened after October 31, 2019, as stated in an official announcement on Saturday. This move underscores the severe financial challenges faced by the country, where economic turmoil has been escalating since 2019.
Lebanon's caretaker Prime Minister, Najib Mikati, disclosed in exclusive statements to Sky News Arabia last January that the government is actively examining legislation related to the recovery of bank deposits. The proposed legislation aims to prioritize small depositors with accounts holding less than USD100,000. Mikati emphasized that all small deposits falling below the USD100,000 threshold would be promptly returned to customers in full, while larger amounts would also be reimbursed but within an extended timeframe.
The economic downturn in Lebanon has been palpable, with the local Lebanese pound witnessing a staggering loss of over 90 percent of its value. Banks have further compounded the crisis by restricting certain depositors from accessing their savings, with the permitted monthly withdrawal limit in foreign currency capped at a mere USD300. This restrictive measure has added strain to an already dire situation, leaving many struggling to navigate the financial challenges brought about by the economic collapse.
The repercussions of this crisis are evident in the drastic depreciation of the local currency, with the exchange rate plummeting to approximately 89,000 liras in the parallel market. This marks a stark contrast from the comparatively stable rate of 1,500 liras in 2019, underscoring the severity and rapidity of the economic collapse in Lebanon. As the nation grapples with the most violent economic crisis in its history, the limited withdrawal measures implemented by the Central Bank offer a glimpse into the urgent and challenging circumstances facing depositors and the wider financial landscape.
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