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The poor Lebanese citizen only deprived him of withdrawing money from his bank account in local currency, after previous decisions that prevented the withdrawal of more than two thousand dollars a month.
Lebanese activists shared information on Twitter about several banks that set a withdrawal limit of just two million pounds a month, and this amount is equivalent to about $ 200 today on the black market.
Tweeters complained about the possibility of their inability to withdraw salaries, with some talking that this step may be intended to force people to spend the dollars that are left, as the dollar has become scarce in the market and there is a growing demand for it, because all imports from abroad are made in dollars and not pounds.
Reduce the caps for withdrawals in Lebanese pounds from banks. Two million Lebanese pounds a month alone! pic.twitter.com/XwfIyeOeMi
– YORGOS (@YorgoElBittar) October 14, 2020
In this context, analyst and economist Basil Al-Khatib said during an interview with the Al-Hurra channel that some banks have already started reducing withdrawals in Lebanese pounds, as happened previously when banks reduced withdrawals in dollars.
He added that what is happening today is that there is a “quota” for each bank by the Banque du Liban, which means that the large bank gets a higher quota than the small bank with respect to the ceiling for withdrawals.
Al-Khatib emphasized that there is a request addressed to banks not to give much liquidity in Lebanese currency and to move towards cards, and if a bank wants to give more liquidity than allowed, it will be forced to withdraw from its LBP deposits to long-term at the Banque du Liban.
So even the salary we would not have withdrawn 🤣🤣 What is the mockery?
– RIMA KANSO (@ goldbird60) October 14, 2020
Al-Khatib explained that the Banque du Liban pays interest to banks on long-term deposits in Lebanese pounds, and when these deposits decrease, the interest paid by the Banque du Liban decreases with them.
He noted that this decision limits the circulation of banknotes and forces people to use debit cards for payment and purchase, thus reducing the exchange of banknotes on the black market.
According to al-Khatib, the Central Bank denied asking banks to set a limit on withdrawals, but “in this way, it is trying to cover up,” as al-Khatib put it, “and there is certainly an internal circular between the Bank. Central and the banks in this regard “.
Economics journalist Mahasin Morsal tells the “Al-Hurra” website that the Lebanese Central Bank has set a limit on withdrawals from its bank deposits and has not asked banks to specify a limit for withdrawals to depositors.
He stressed that Lebanon suffers from the existence of a large block of cash in Lebanese pounds, and this matter caused a decrease in the value of the Lebanese pound and higher inflation, and the Lebanese citizen plunged into a vortex, especially when banks “Lebanese” deposits and hold the dollar.
Mursal explained that this step can reduce the size of the monetary block so that it does not grow any more, and this block is approximately equal to around 24 trillion pounds, and this is a very large size.
He also referred to the same goal that Al-Khatib spoke of, which is to reduce the tendency of people to go to the black market to buy dollars, which caused an increase in the exchange rate of the dollar against the Lebanese pound.
He added that after the banking crisis, the Lebanese economy had turned into a cash economy and banking transactions had become very relaxed, because people had lost trust in banks and rarely deposited money in their accounts for fear of not be able to withdraw it later.
He said that there are many people who store cash in their homes, and this step would push them to spend these funds and, in return, traders are very affected by fixing the ceiling on withdrawals, because they buy dollars on the black market to be able to import. and pay foreign merchants and companies.
Mursal warned that setting a cap on withdrawals would lead to a decrease in import operations and increase the contraction, and thus the overall economic situation in Lebanon deteriorated for the worse.
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