Lebanese banks slash dollar withdrawal limit by 50%

Most Lebanese banks on Monday slashed the monthly dollar withdrawal limit by 50%, media reports said.

For example, Bank Audi will give every small depositor who has a dollar account $300 every 15 days instead of $300 weekly. Depositors with accounts over $100,000 will meanwhile get $500 every 15 days while those whose accounts contain more than $1 million will be eligible to $1,000.

Three major banks contacted by AFP on Monday confirmed they have halved the dollar withdrawal limit since the beginning of February, some capping the amount at $600 a month.

The informal controls have sparked public outrage in protest-hit Lebanon, where an anti-government street movement launched on October 17 has grown increasingly angry at banking policies.

“These new illegal measures by banks come with the political blessing of the new government,” said activist Lucien Bourjeily.

The new cabinet, which was formed last month, is expected this week to outline its financial rescue plan.

Experts and demonstrators say banking controls amount to a de facto “haircut” on savings because they are forcing dollar depositors to deal in the nosediving Lebanese pound.

The currency has plunged against the greenback on the parallel exchange market, though the official peg of 1,507 pounds to the dollar in place since 1997 remains unchanged. 

Central bank chief Riad Salameh last month said that he agreed with money exchange houses to cap the parallel rate at 2,000 — but several exchanges continue to charge rates edging towards 2,200.

Salameh last month asked for special powers to authorize the banks to set withdrawal limits, which had not formally been backed by the government.

The finance ministry, however, has yet to publicly respond to his request.

AFP