Lebanon: Banks to Reopen on Monday

Lebanon: Banks to Reopen on Monday
Lebanon: Banks to Reopen on Monday

Lebanon’s banks will reopen on Monday, with each taking their own measures, the country’s banking association said in a statement on Sunday.

The country’s banks have shut for about five days following a spree of bank hold-ups by frustrated depositors seeking access to their frozen savings.

On September 16, several banks were held up in Lebanon, where commercial banks have locked most depositors out of their savings since an economic crisis took hold three years ago, leaving much of the population unable to pay for basics.

Lebanon’s banks association announced a three-day closure over security concerns and urged the government to pass laws to deal with the crisis. The closure was extended later on.

Authorities have been slow to pass reforms that would grant access to $3 billion from the International Monetary Fund, and on Friday failed to pass a 2022 budget.

Without a capital controls law, banks have imposed unilateral limits on what most depositors can retrieve each week in US dollars or the Lebanese lira, which has lost more than 95% of its value since 2019.

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According to a report, the Lebanon’s banks will reopen on Monday, the banking association said, after five days of closure following a wave of holdups in the country by depositors seeking access to their frozen savings.

The association said in a statement on Sunday that the decision to reopen “was taken after consideration of the current difficult security conditions and the need to maintain the safety of customers and employees alike, in the absence of adequate protection by the state”.

It added each bank would determine its own channels for banking operations with commercial and educational institutions, and the health care sector amongst others.

A top Lebanese banker on Friday criticised politicians for failing to enact a capital control law, saying this was the way to avoid bank raids by savers demanding funds from frozen accounts and to stop banks’ “discretionary practices”.

The holdups reflect savers’ desperation three years after Lebanon’s financial system collapsed due to decades of state corruption and waste, and unsustainable financial policies.

The government has agreed neither a financial recovery plan nor enacted reforms deemed vital to get Lebanon out of the crisis. While the government says it is committed to reforms, the International Monetary Fund says progress remains very slow.

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