Four of the largest banks in Lebanon have placed limits on money transfers outside of the country regardless of the amount or the destination according to a Bloomberg report. This comes in a continuous wave of monetary restrictions from banks in Lebanon amid civil unrest.
The report says that tellers in these 4 banks have been telling their clients that transfers of deposits have been stopped until further notice. Some said to be making exceptions for transfers for medical purposes, paying for university fees or loans. The limits placed by the banks has been confirmed by at least 2 official banks who preferred to remain anonym according to the report.
Banks have received requests from large depositors to transfer their money out of the country, however, they have been well understanding the limits until some political stability is reached in the country said the two unnamed bank officials.
“It’s gone better than expected,” one of the official bankers said.
Control over people’s money is turning into a weapon for governments that need to buy some time after having failed the economy.
Lebanon is one of the most indebted countries in the world and the main source that keep the economy alive ate inflows from the diaspora. According to some economists, these inflows might slow down amid restrictions and limits placed by the banks, while Lebanon has only a few viable options to find a solution.
Protests in Lebanon continue from two weeks with hundreds of thousands of people on the streets against the corrupted political class. Prime Minister Saad Hariri resigned a few days ago and has not been replaced yet, growing fears that a solution about the economic crisis is not on the horizon.
Lebanon has delayed a foreign debt of nearly $3 billion because of the protests. However the Lebanese Central bank intents to pay later this month.
The Beirut stock exchange opened today after two weeks’ closure. Shares in Solidere, a real estate company went down by 12.84%.
To reestablishing confidence President Michel Aoun gave support to the idea of a technocrat government as protesters request. Bankers think that a technocrat government with giving the right signals to relieve pressure from the economy and bring more confidence into the markets.
“Despite the various challenges looming at the horizon, the formation of a credible technocrat government can still restore confidence and launch the required reassurance signals for markets, depositors and investors,” said Marwan Barakat, chief economist at Lebanon’s Bank Audi.
Many banks this year have placed informal limits on transfers and withdrawals. Today after 2 weeks finally banks opened but restrictions became tighter by raising the transaction fees to discourage people from withdrawing money for their daily needs.
The head of the Association of Banks in Lebanon Selim Sfeir stated that:
“The banks are monitoring the requirements and needs of citizens and are ready to take the necessary measures to ensure normal operations,”
The idea of a bank that limits clients from their money is insane. It will be hard to restore confidence in banks in Lebanon especially after new restrictions every day. An alternative is needed as fast as possible to free people from bankers. Bitcoin makes this possible.
Long bitcoin and short the bankers.