Cash is king in Lebanon as banks atrophy – Reuters


Cash is king in Lebanon as banks atrophy – Reuters

[1/8] A money exchange vendor holds stacks of Lebanese pound banknotes at a shop in Beirut, Lebanon January 19, 2023. REUTERS/Mohamed Azakir

Cash economy replaces once lauded-banking sector'Impossible' for state to collect taxes in cash economy - traderWest frets over money laundering, terrorism finance - diplomatCHTAURA, Lebanon, Jan 31 (Reuters) - The money exchange shop in Lebanon's Bekaa Valley was buzzing with business. Cellphones pinged endlessly and employees shouted out various rates as customers flocked in carrying plastic bags of the crashing local currency to buy U.S. dollars.

"Welcome to the Wall Street of Lebanon," grinned the storefront's owner, a machine gun leaning on a rack behind him in case of a robbery.

Cash is now king in Lebanon, where a three-year economic meltdown has led the country's once-lauded financial sector to atrophy.

Zombie banks have frozen depositors out of tens of billions of dollars in their accounts, halting basic services and even prompting some customers to hold up tellers at gunpoint to access their money.

People and businesses now operate almost exclusively in cash. The local currency in circulation ballooned 12-fold between Sept. 2019 and Nov. 2022, according to banking documents seen by Reuters.

Most restaurants and coffeeshops have hung apologetic signs stating that credit cards

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