Lebanon's BDL: Dollar deposits can be withdrawn in stages as of June

BDL said in a statement that it is currently negotiating with Lebanese banks with the aim of adopting a mechanism whereby banks begin to gradually pay off depositsin all currencies

  
The main gate of Lebanon's central bank, which has been defending the national currency, in the busy Hamra district of Beirut August 3, 2000.

The main gate of Lebanon's central bank, which has been defending the national currency, in the busy Hamra district of Beirut August 3, 2000.

REUTERS/Reuters Photographer

BEIRUT: The Central Bank said Sunday that deposits in all currencies dating back before Oct. 17, 2019, and as they became on March 31, 2021, can be withdrawn but in stages as of June of this year, a move that still raises many questions.

BDL said in a statement that it is currently negotiating with Lebanese banks with the aim of adopting a mechanism whereby banks begin to gradually pay off depositsin all currencies.

But the statement did not specify whether the dollar deposits before the Oct. 17 anti-government protests would be subject to a haircut or can be withdrawn in installments.

The other question is how the banks will come up with the dollar banknotes, especially since the lenders have lost most of their dollar deposits and whether these deposits will be deducted from BDL’s foreign currency reserves.

“To this end, the Banque du Liban asked the banks to provide it with data to build upon a plan in which sums amounting to $25,000 would be paid, in US dollars or any foreign currency, in addition to what is equal to it in Lebanese pounds. These sums will be divided into installments over a period to be determined by the Central Bank of Lebanon soon. It is expected that the payment will start from June 30, 2021, subject to obtaining legal coverage,” the statement explained.

BDL added that after success of Circular 154 , the Central Bank is launching an initiative aimed at comforting the Lebanese within the laws and principles that sponsor the work of the Banque du Liban, despite the suffocating crisis deepened by the absence of an effective government that would undertake the required reforms and restore Lebanon’s Arab and international relations and internal and external confidence.

“BDL will also launch the SAYRAFA platform, that is, the electronic platform for exchange operations with the participation of banks and money changers, with what this platform provides in terms of transparency in prices and its subscribers, so that it does not include illegal cashiers. BDL will issue circulars to the public upon receiving the response of the finance minister, as stipulated by law.”

BDL said it would intervene when necessary to control fluctuations in the exchange market prices, bearing in mind that the price will be determined by the market movement that will be open to individuals and institutions.

“Contrary to what is rumored in a number of media outlets, the Banque du Liban still believes in selling the dollar to the banks at the official exchange rate for the raw materials that the government decided to support, and it is committed to selling these dollars at the official price for all the appropriations approved by the official references, and the The Central Bank carries out these operations daily and accordingly,” BDL statement said.

BDL also said that in order to preserve the continuity of the subsidy approach as required by the supreme Lebanese interest and the interest of depositors, and in compliance with the Monetary and Credit Law, the Banque du Liban has sent letters to the relevant ministries in order to rationalize the support, and it is awaiting realistic answers that can be implemented legally.

“The Central Bank of Lebanon has adopted, for a long time, forward-looking and proactive policies in order to secure the continuation of financing for the basic needs of Lebanon and the Lebanese. Were it not for the Central Bank to anticipate the future and collect its reserves in foreign currencies through financial engineering and operations that showed their benefits in these difficult days, Lebanon would not have been able to finance its needs, especially for the most needy segments of society, and would not have been able to withstand for many months despite the great government vacuum. “

“Our initiative today, while seeking to rationalize subsidies, comes in the context of trying to secure some alternative and temporary solutions and does not cancel our call on officials to accelerate the radical solutions required for reform and economic advancement, which would secure a comprehensive renaissance of the financial situation,” the statement concluded.

Copyright © 2021, The Daily Star. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Levant