Lebanon: a temporary limit on bank withdrawals from the Central Bank

Beirut-Anatolia: The Lebanese Banking Association and the Lebanese Central Bank confirmed that the establishment of a ceiling for Central Bank bank withdrawals in local currency is a temporary measure aimed at reducing inflation.
“The action taken to set caps on bank cash withdrawals in lira from the central bank is by its nature a temporary measure,” the association said in a statement after its board of directors met with Bank of Lebanon Governor Riyadh. Salameh. He added that the measure “imposed by exceptional conditions used by central banks in the world to combat inflation and the excessive rise in prices of goods and services, while still meeting the global liquidity needs of the local market.”
According to the statement, the two parties emphasized “ensuring what the Lebanese market and bank clients need in terms of liquidity, without the latter being limited to cash.”
And they decided “to motivate citizens and bank customers to use the other payment tools available through the banking system, credit cards, checks and bank transfers.”
In the last period, banks had deliberately restricted depositors’ withdrawals, whether in dollars or pounds.
Last Wednesday, the Banque du Liban said in a statement that it had adopted a mechanism to set a cap on withdrawals by banks from their checking accounts with the Central Bank, and by exceeding these caps, the required amounts of the accounts are calculated. of banks frozen in it, such as certificates of deposit and time deposits.
Lebanon is suffering the worst economic crisis since the end of the civil war (1975-199) and a strong political polarization.
The price of the dollar in the parallel market is 8,000 pounds, compared to 1,515 pounds in the official market, and the average price of 3,200 pounds is the price subsidized by the Central Bank.