Lebanese banks reopen for first time in two weeks - GulfToday

Lebanese banks reopen for first time in two weeks


People queue outside a branch of Fransabank in Tripioli on Friday. Omar Ibrahim / Reuters

Lebanese banks opened to customers on Friday for the first time in two weeks following an unprecedented wave of protests that led the prime minister to resign, with small numbers of customers queuing as the doors opened.

At a branch of Blom Bank, one of Lebanon's biggest banks, in Hamra Street, around 10 customers entered the bank as its doors opened after 8:00am, an eyewitness witness said.

The number then grew to 20.

In the Sodeco district of the capital, around 20 people were queuing outside a branch of Frasnsabank and around 15 were waiting outside a branch of Bank Audi.

On Thursday banking sources told media that country's banks will seek to prevent capital flight when they open on Friday but without imposing formal capital controls after a two-week closure due to nationwide protests which led the prime minister to resign.

Analysts and bankers have cited widespread concern about a rush by depositors to withdraw their savings or transfer them abroad when the banks reopen.

The central bank has pledged not to impose capital controls when banks re-open, measures that could deter the currency inflows and investment Lebanon badly needs to weather its most severe economic pressures since the 1975-90 civil war.

But seven banking sources said on Thursday that while Governor Riad Salameh was sticking to that policy, commercial banks would only be allowing transfers abroad in cases such as payments to children, for healthcare or loan payments.

Salameh was leaving it to commercial banks to decide on individual policies that could make it harder move funds overseas and convert them into foreign currency and less attractive to withdraw savings.

"He is not officially declaring capital controls, but left it to the banks to do it," a senior banker said.


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