The Lebanese banking system.

Beirut – Joelle Riachi –

Settlement or breaking of accounts … two words that many Lebanese repeat these days, referring to the massive demand of depositors, who are classified as large bank clients, to get what they can of their money through checks they receive in cash, value determined according to the “daily price of the check market”. This is a phrase that is also in force, and the determination of its value is determined every day at the eleventh hour before noon, and based on which the negotiation is “quoted” for the rest of the hours of the day.

The price of the $ 100,000 check ranges from 32,000 to 34,000 in cash, depending on the market price. The price fell along with the increase in the dollar exchange rate on the black market, the only market where green currency is available in Lebanon.

The price dropped from 38% to 33% and fluctuates according to supply and demand, noting that the demand for US currency cash increases.

The question remains: What adventurer would give away his cash dollars in exchange for checks? The answer is almost limited to wholesalers of vegetables, tobacco and beverages who obtain a Lebanese pound coin, and take the initiative to buy dollars in cash on the black market, and sell them for checks on the condition that they do not increase their size. That is, they ask to distribute a check for $ 100,000 through five checks, each for $ 20,000. Through the last step, they will be able to sell the checks at retail to small depositors who are engaged in check trading to collect income in Lebanese pounds, taking advantage of the price of the official banking platform that allows them to withdraw US dollars at 3,900 pounds, according to account ceilings. specific.

On the other hand, merchants benefit from hedging their operations with dollars supported by the Banque du Liban, for some foods, petroleum derivatives and flour.

Some banks used this trade by selling checks to money changers in exchange for cash. Banks turned to the banking business instead of banking. In a Lebanese banking market, there were riots where the famous intrabank crisis of the 1960s occurred, which the Lebanese banking sector managed to overcome. And he played the role of “Bank of the East”, which is not available these days and the next.

In field operations, traders buy checks and pay in cash. The path to them goes through experienced intermediaries, who strictly know the customer’s eligibility to avoid bad check “headaches”. And when the first operation is confirmed and the first operation is completed, the seller and the buyer relax, and embark on long-term operations, reaching a semi-closed circuit that always takes place outside the usual place until recently, which is Known as the Lebanese banking system.

In exchange for ensuring the eligibility of the owner of the check, the seller, that is, the merchant, who often sends a mediator to perform the operation, shows the dollars in cash and passes them through a small machine to count them and make sure that there are no forged papers. After the first trade, trust is strengthened and several trades are launched. The owner of the check insures his colleagues to do similar work with the merchant.

One of the clients, on condition of anonymity, of course, spoke to Al-Anbaa about “two insurance dealers, one of whom is in the vegetable trade and the other in the tobacco trade.” They are both in one zone. The first in Byblos and the second in Hamra in the capital, Beirut. Thus, I can guarantee that I get cash dollars through which I will be able to save my savings even in a way with the least possible loss on the one hand, and also manage to fulfill my business in hiring on the other hand.

Similar stories from several clients, including a resident of an Arab country who voluntarily withdrew his savings from a Lebanese bank at a rate of 35% and placed them in a foreign European bank outside of Beirut.

A new market joins a Lebanese newspaper full of financial and monetary hesitations after October 17, 2019, the date of the outbreak of unprecedented protests in Lebanon, coinciding with the announcement by the banks of unilateral measures that imposed caps on withdrawals and withheld cash dollars from their depositors, and restricted their access to green currency to those who sent them from abroad, what he called “fresh dollars.”

A banking system collapses and becomes a banking system, and the start of 2021 is said to see more negative repercussions. Meanwhile, the Lebanese resort to methods to help them cope with newspapers unusual in their modern history.