12 cents on the dollar and 6,000 greenbacks in banks?

Eva Abi Haidar wrote in the newspaper “Al-Jumhuriya” under the headline “Remaining deposits: 12 cents on the dollar”: “It has been about a year since depositors’ funds were held in Lebanese banks, and some they still live denying the financial crisis we are going through, considering it a conspiracy. ” Or a “summer cloud and pass”, and the dollar will return to 1,500 pounds and recover its deposit in dollars, as soon as this cloud clears. What is the truth about placing deposits in banks? Do they really exist? And when can they be recovered? And under what conditions?

Where have we been and where have we become? Where are our deposits and why have they evaporated? Is there any hope of getting it back? This is the spokesperson for Lebanese and expats who felt, about a year ago, that their deposits were just fictitious numbers, that their savings and harvests for life evaporated, and that all they earn is barely enough food. When will this nightmare end and one of the officials will come out and tell the Lebanese the truth and draw a roadmap for the next stage?

In light of this prevailing uncertainty, so far it seems that the next stage will be worse than the previous one, so where did the state fail? What measures were taken to avoid this sharp fall to the bottom?

In context, financial adviser Michel Qazah says that what happened from October 17, 2019 to the present day, is inequality between depositors, as bank owners, some politically influential people and shareholders of banks were able to get their money out of Lebanon, while other people’s money got trapped in banks. . He told Al-Gomhoria: The Governor of the Banque du Liban could have issued a circular on October 18, 2019 imposing Capital Control to prevent the transfer of funds abroad, emphasizing that the Banque du Liban has the full authority to issue such a decision, and we have seen how it issued a set of circulars in which strong decisions were made. Including Circular No. 154.

When asked: Is there any hope of recovering the outstanding deposits in the banks? Qazah replied: When one of the representatives asks for the restoration of the deposits, this means that they do not exist, and if we do not want to touch the gold, then does it mean that the amount available in the bank of each dollar is about 12 cents? This means that 88% of the deposits are non-existent.

He added: The Central Bank today refuses to convert deposits into pounds, so it is allowed to withdraw dollars according to the rate of 3900 pounds. Given that we are in an unstable situation, depositors resorted to withdrawing their dollars from banks, despite their exposure to a 45-50% cut when the price of the dollar against the pound oscillated between 7,200 and 7,500 pounds, while that this percentage increased today between 55 and 60% with the arrival of the dollar. In the parallel market at 9,000 pounds.
6 months hard
Qazah stressed that the next stage, which lasts from six months to a year, will be very difficult for the Lebanese citizen, especially because the exchange rate of the dollar against the pound is likely to rise in the parallel market to more than 20 thousand , but that the situation will gradually improve after signing with the Monetary Fund, because it is the only entity capable of injecting new money into the market. He said: A return of confidence in the banking sector is possible, but there are several steps before that, including: reducing the number of banks operating in Lebanon from 60 currently to 10, and reviewing the way they operate, and Depositors can then be attracted by giving them cash dollars that can start at $ 200 per week. And it increases over time, but that is impossible 5 years before the start of the application of Capital Control, provided that the count starts from the date of signing with the IMF.

And Qazah hoped that in case Lebanon did not sign an agreement with the IMF, the Governor of the Banque du Liban would resort in the near future to raise the dollar price approved in banks for withdrawals in foreign currency from 3,900 pounds to 6,000 pounds. , highlighting that the data indicates that there is still no political decision to advance. Monetary Fund. He pointed out that Capital Control and the bail in are among the conditions imposed by the IMF, and the application of the bail in, that is, that the creditors own shares in the Lebanese banks, a step rejected by the owners of the banks because it means a change of administrators and owners of banks, knowing that their situation today is similar. Who runs a bankrupt company. The banks lent to the Banque du Liban, and unfortunately they still hope to get their money back, which is the depositors’ money, but this matter is highly unlikely because the Lebanese economy entered the negative box. ” To read the full article, click here.