Exchange shops are now trading at 1,900 Lebanese pounds to the dollar, a devaluation of more than 25%.
Source: Associated Press
BEIRUT: Lebanon’s private banks reopened Friday amid boosted security after a two-week closure because of anti-government protests that have paralyzed the country.
The reopening follows Prime Minister Saad Hariri’s resignation this week, a key demand of the protesters, who have blocked major roads and packed into public squares. Lebanese have been protesting since Oct. 17, demanding an end to widespread corruption and mismanagement by the political class that has ruled the country for the past three decades.
There were concerns that reopening the banks could lead many to withdraw their savings, but by midday the banks appeared to be operating normally. There were no signs of long lines or frustration at four separate bank branches in downtown Beirut, and customers leaving the branches said they were operating normally.
ATM machines have continued to function throughout the crisis, though many of them stopped dispensing U.S. dollars, which have long functioned as a widely accepted second currency.
The central bank has not imposed any capital controls, which would further undermine confidence in the economy, but the private banks appear to have imposed their own restrictions. Some banks are only allowing clients to withdraw $2,000 a week in foreign currency, and some have imposed an outright ban on transferring money abroad.
The protesters have directed much of their rage at the banks, and one of the most popular chants refers to central bank governor Riad Salameh as a “thief.” On Friday, four protesters entered the Association of Banks in Lebanon and placed a chain on the gate, preventing people from entering or leaving the building.
“This is the house of corruption,” one of the protesters told the local Al-Jadeed TV, before police arrived and detained the three young men and a young woman.
Commercial banks are largely owned by ruling politicians and profit from holding public debt. Lebanon is $86 billion in debt, accounting for 150% of its GDP.
The bank closures have taken a toll on ordinary Lebanese, preventing employers from distributing salaries. Small businesses that need foreign currency to import products have had to do without or turn to a newly emerged black market.
The Lebanese pound has been pegged to the dollar at an official rate of 1,507 to the dollar since 1997. Exchange shops are now trading at 1,900 Lebanese pounds to the dollar, a devaluation of more than 25%.