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Lebanese Banks Impose New Measures on Depositors

Lebanese Banks Impose New Measures on Depositors

Friday, 1 November, 2019 - 08:15
FILE PHOTO: The closed entrance of the Association of Banks in Lebanon in downtown Beirut, Lebanon, October 25, 2019. REUTERS/Alkis Konstantinidis

Lebanese banks reopened on Friday after remaining shut for 12 consecutive working days amid a series of new procedures imposed on clients in an effort by the authorities to protect the banking sector.

Long queues formed outside banks in the capital, Beirut, as doors opened.

Sources told Asharq Al-Awsat that the new measures would prevent transfers from local banks to outside the country in the coming period.

“Currently, there is a cap for outward financial transfers, despite some exceptions allowing transfers for Lebanese students studying abroad,” the sources said.

They explained that the banks would raise the ceiling of payments in credit cards abroad.

“This given margin on cash withdrawals is exceptional for a limited time. It aims to control a drawdown and to prevent the withdrawal of large sums of money,” the source said.

Also, Lebanese lira deposits in banks could be exchanged to a foreign currency, the sources said, adding that such decision aims to confirm the solvency of the Lebanese monetary markets and to boost confidence in the financial situation.

Following a meeting held on Thursday, Lebanon's banking association said banks across the country would open their doors on Friday morning to meet "urgent" needs such as salary payments.

Banks in Lebanon were closed for safety reasons following protests that started on Oct. 17 demanding the resignation of the government.

Meanwhile, Lebanon’s dollar bonds rose for the first time in ten working days on Thursday.

The 2021 issue rose 0.8 cents, its most in six weeks, to 68.5 cents in the dollar, while the 2037 bond added 0.6 cents to 54.9 cents in the dollar, Tradeweb data showed.

The bonds have been under huge selling pressure in recent days after two weeks of anti-government protests that have led to the closure of banks and simmering concerns about the government’s ability to meet its debt obligations.

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