2021 The year of the banking “qualifiers” in Lebanon: Who will play the finals?

Beirut – Joelle Riachi –

The majority of Lebanese made a decision on a complete exit from the banking system with as little damage as possible, after the vibration of confidence reached an unprecedented level regarding an advantage that was specific to Lebanon in the East through its Bank System.

It is true that the country witnessed a liquidity crisis in 1966 that ended with the bankruptcy of the Intra Bank, but Arab financial flows returned in force to Lebanese banks even after the Arab-Israeli war in October 1967.

Despite the civil war years (1975-1990), the Lebanese pound maintained its purchasing power against the US dollar exchange rate, even when it shook in the early part of the early 1980s during the last century. It belonged to President Amin Gemayel, and the exchange rate of the US dollar crossed the three-pound threshold, on One-Way Trip. The exchange rate of the pound later stabilized, despite the “tire revolution” in 1992 that overthrew the government of the late Prime Minister Omar Karami and paved the way for the late Prime Minister Rafik Hariri to Saraya after a transition period with the late President Rashid Solh. At that point, the dollar exchange rate reached the 3,000-pound threshold before settling again at 1,515 pounds for less than three decades.

The official announcement of the collapse occurred last year with the outbreak of the protests on October 17, unprecedented in the country’s history, with which Lebanese banks traced what became known as the “pre-October 17” era. when deposits in US dollars were frozen, and later those that received denominated “fresh” dollars were made available. History withdrawn in cash from banks.

Depositors’ loss stories diverge and are spread between cash held, and project execution and completion faltered, with the national currency exchange rate hitting an unprecedented collapse as the dollar hit the threshold of ten. thousand pounds, and the current fluctuation between eight thousand and eight thousand and five hundred pounds.

Perhaps the trembling in confidence is due in large part to banks imposing restrictions on withdrawals of depositors of all kinds, and reducing them to the limit of the shortage of obtaining cash in Lebanese pounds, which are barely enough for citizens meet your needs for food, drink and fuel. Few have taken the road to salvation quickly, spending bank savings and saving money in foreign currency. Although a good part left with the worsening of the crisis to the appetite for the purchase of real estate, replacing the cash in the banks with real estate bonds, and then they went to the stage of demand for the purchase of housing units, which are available for its use in a faster way than real estate, which does not require higher financial expenses to perform them in the service, that is, obtaining economic benefits through its rental or sale.

The most dangerous thing in the operations of collection of the cash sale prices of apartments and real estate is that they are carried out outside the Lebanese banking system, the buyer paying the cash price to the seller, preventing the latter from entering the money in the banks, preferring to store it at home or transfer it abroad. And many of the sales are occurring between clients residing in the Arab and African countries of the expansion to America and Australia, and between residents selling in exchange for money transfers to foreign banks.

As for Lebanese financial banks, they only observe and witness one-way operations: withdrawals from depositors according to available methods, either by guaranteed bank checks issued by the Central Bank and paid only in Lebanon, or by transfers from national accounts to accounts. local. In summary, depositors do not add liquidity to bank funds, except those that creditors pay in national currency, or in non-monetary dollars, which are known as “bank screen dollars.”

And if the end of 2019 and the entire year 2020 witnessed a suffocating financial crisis and the collapse of the banking sector, then 2021 is likely to be the year of “bank liquidations”, with the initiative of several banks to close their branches. in the regions, in parallel with the accompanying employee exchange, and this matter is very active. In the last two months, with banks abandoning some of their employees and “buying their silence” with a compensation that is considered generous for those who spend about twenty months, and its value is paid on the exchange rate of the platform approved by the Banque du Liban, that is, about four thousand pounds to the US dollar.

The Lebanese circulated a joke some time ago on social networks, according to which a woman entered a bank and asked the employee sitting behind the outline, “Half a kilo of brick and two types of municipal cheese.” When the clerk surprisingly replied: “We are in a bank, not a supermarket,” the lady calmly replied: “And what banking services do you offer to customers?”