Lebanon Banks Halt Dollar Withdrawals over 'Airport Closure'

W460

Banks in cash-strapped Lebanon have suspended dollar withdrawals until the airport reopens, a banking source said on Monday, after authorities grounded flights to halt the spread of the novel coronavirus.

The country's international airport in Beirut has been closed for almost two weeks as part of measures to stem COVID-19 in Lebanon, where 446 official cases and 11 deaths have been reported.

The flight hub is to remain closed until at least April 12, a date until which all non-essential workers have been told to remain at home across the country.

A member of the Lebanese banking association, who asked to remain anonymous, said all dollar withdrawals would be halted "pending the airport reopening."

"Dollars are imported and this is no longer possible because of the coronavirus," the source told AFP.

"Dollar importers have suspended work."

On Monday, long queues formed outside several banks north of the capital as monthly salaries came through after two weeks of ongoing home confinement, an AFP photographer said.

A least two banks told clients that dollar withdrawals had been halted.

Coronavirus is the latest crisis to hit Lebanon, already reeling from mass anti-government protests and in the grips of the worst economic crunch since its 1975-1990 civil war.

For decades, the Lebanese pound has been used interchangeably with the dollar at a fixed exchange rate of 1,507 pounds to the greenback.

But a liquidity crisis had seen banks gradually restrict access to dollars and halt transfers abroad since fall 2019, leading the value of the Lebanese pound to plummet on the black market.

On Monday, however, the banking association agreed to allow dollar transfers to Lebanese students abroad to help them face the coronavirus pandemic, the finance ministry said in a statement.

A dollar is now worth more than 2,700 pounds on the black market and prices have shot up in recent months, but the banks have maintained the old exchange rate.

Those with dollar accounts are frustrated at their inability to take out most of their cash to exchange it at a better rate from unofficial money changers, with some banks before Monday already capping withdrawals at as low as $400 a month.

Lebanese banks stand accused of transferring millions of dollars abroad while preventing others from doing so after the start of mass protests against the political elite last October.

Comments 1
Thumb whyaskwhy 30 March 2020, 17:33

But did Papa of all not say that the banking crises is over and Lebanon is doing well?
WTF is he anyway? not a peep from him in a few weeks...is he still living or just asleep as usual?.
He has proven that he is about as useful as a sack of hammers...