Strong Lebanon Bloc Urges Protection of Citizens' Bank Deposits

The Strong Lebanon parliamentary bloc on Tuesday said “the priority should be the protection of the bank deposits of Lebanese citizens.”

It accordingly urged the new government to devise “an integrated and clear rescue plan” that would involve “measures binding for the parties concerned, including the central bank and the commercial banks.”

“Selectivity and ambiguity in this matter is rejected, especially as to the restrictions imposed on deposits including on urgent withdrawals and transfers, which have not led to any positive results until the moment,” the bloc added.

Experts and demonstrators say banking controls amount to a de facto "haircut" on savings because they are forcing dollar depositors to deal in the nosediving Lebanese pound.

The currency has plunged against the greenback on the parallel exchange market, though the official peg of 1,507 pounds to the dollar in place since 1997 remains unchanged.

Central bank chief Riad Salameh last month said that he agreed with money exchange houses to cap the parallel rate at 2,000 -- but several exchanges continue to charge rates edging towards 2,200.

Salameh last month asked for special powers to authorize the banks to set withdrawal limits, which had not formally been backed by the government.

The finance ministry, however, has yet to publicly respond to his request.