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Lebanon banking association recently warned any increase in the tax on interest payments would affect capital flows to Lebanon, weaken banks’ ability to play their financing role in the economy, and obstruct growth.
Lebanon banking association warned last May that any increase in the tax on interest payments would affect capital flows to Lebanon, weaken banks’ ability to play their financing role in the economy, and obstruct growth. Despite the warning the tax on interest was increased

Lebanon’s banks will remain closed on Friday due to safety concerns amid nationwide protests but will reopen as soon as the situation stabilises, the country’s banking association said on Thursday.

In a statement carried on Lebanon’s state news agency, Lebanon’s Banking Association said: “Bank operations will be limited to providing wages of customers and employees at the end of the current month through ATMs.”

Banks have not opened for more than a week, concerned that savers will try to pull out their money and that they could be attacked by demonstrators who partly blame financial institutions for the situation, bankers said.

Measures proposed by PM Hariri this week to promote reform and appease the protesters included a $3.4 billion contribution from the central bank and commercial banks.

Ratings agency Moody’s warned confidence in the government’s ability to service its debt could be further undermined by the plan, which forces banks to accept lower interest on its debt.

REUTERS

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