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The Lebanese Association of Banks stated that all Lebanese banks will continue to provide cash liquidity in Lebanese pounds to the market naturally, in line with what has been done over the last period in order to maintain stability in the market, highlighting that the Central Bank of Lebanon confirmed that it will continue to provide banks with cash liquidity as usual..
The Association of Lebanese Banks indicated in a statement that liquidity in Lebanese pounds is guaranteed by the Lebanese Central Bank and banks, and not limited to cash, and asked Lebanese and banking clients to use other means at their disposal, like credit cards, checks and bank transfers..
The Central Bank of Lebanon had issued a decision to set caps for banks to withdraw Lebanese pounds, with the aim of fighting inflation and protecting the exchange rate of the Lebanese pound, which collapsed against the US dollar of 1,500 pounds at a price average of 8,000 pounds on the black market, especially after the money supply rose in the lira. From about 5 trillion lire at the beginning of 2019 to over 24 trillion lire now.
The move unleashed a state of confusion among bank customers, especially after several banks significantly restricted withdrawals in Lebanese pounds that exceeded 50% of the amounts that could be obtained, and the decision was met with strong criticism from the business sectors and institutions in Lebanon, which they warned would follow. There is a state of suffocating deflation and economic collapse, especially as the Lebanese cannot get their money and savings in US dollars, which have been frozen in the banking sector..
