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Judicial Order to Ban Taking US Dollars Out of Lebanon

Judicial Order to Ban Taking US Dollars Out of Lebanon

Monday, 28 October, 2019 - 07:30
FILE PHOTO: A general view of Lebanon's Central Bank building in Beirut, Lebanon January 4, 2017. REUTERS/Jamal Saidi/File Photo

Lebanon’s Public Prosecutor Judge Ghassan Oueidat issued an order on Sunday to ban traders and money exchangers from taking significant amounts of physical dollar currency out of the country at air and land borders, state news agency NNA said.

People are normally allowed to take large sums of dollar cash out of Lebanon with an ordinary permit from customs authorities.

However, the news agency said Oueidat’s order would impose the ban until the central bank determines a new mechanism for regulating such transfers.

“The customs directorate will subject the transfer of funds to the mechanism that Lebanon’s central bank will determine,” NNA reported.

Banks across the country have been closed for eight working days due to unprecedented rallies against political leaders blamed for corruption and steering the country toward economic collapse. There is no sign of moves toward a compromise between the government and protesters, whose demands include its resignation.

Lebanon’s banking association said banks would remain closed on Monday, the first day of the working week and until stability is restored, amid growing fears that a rush to withdraw savings when they reopen could deplete dwindling foreign currency deposits.

Separately, Central Bank Governor Riad Salameh said in a statement on Sunday that currency exchangers must be licensed by the central bank to move funds, do it through licensed companies or apply for a license.

“Then there are no restrictions on the amounts shipped and there is no need to request prior authorization,” the central bank statement said.

“The Lebanese exchange market will remain a free market in accordance with the current [central bank] laws and circulars. The BDL will not issue any new circular on this subject,” it said.

Lebanon, where the Lebanese pound currency is pegged to the dollar, is one of the world’s most heavily indebted states.

Capital inflows needed to finance the state deficit and pay for imports have been slowing down, generating financial pressures not seen in decades, including the emergence of a parallel market for dollars.

Early this month, unions of several vital sectors in Lebanon held strikes over a shortage in US dollar, required for importing their goods and basic products.

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