Lebanon’s central bank announces ‘conditional’ plan for dollar withdrawals

Lebanon’s central bank announces ‘conditional’ plan for dollar withdrawals

Lebanon’s central bank on Sunday announced a “conditional” plan that would allow depositors, hit by strangling financial restrictions, to access part of their foreign currency savings stuck in Lebanese banks.

Lebanon is in the grips of its worst economic crisis since the 1975-1990 civil war, and more than half of the population is now in poverty.

The Lebanese pound, officially pegged to the dollar at 1,507 since 1997, has lost more than 85 percent of its value against the greenback on the black market.

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Since Autumn 2019, banks have largely prevented ordinary depositors from accessing their dollar savings or transferring them abroad, forcing them to resort to the black market to obtain foreign currency.

Holders of dollar accounts have only been able to access their money by exchanging it into the local currency at a rate of 3,900 to the greenback.

The dollar is currently trading for more than 12,500 pounds on the black market.

The central bank said Sunday it was negotiating “a mechanism (with Lebanese lenders) under which the banks would begin to gradually give (clients) access to their deposits... in all currencies.”

The institution is mulling a plan that would involve