| People queue outside a branch of Bank of Beirut in Ain el-Remmaneh, Lebanon November 1, 2019. REUTERS/Mohamed Azakir |
Lebanese banks opened on Friday for the first time in two weeks after protests that prompted the prime minister’s resignation, with queues building and customers encountering new curbs on transfers abroad and withdrawals from U.S. dollar accounts.
An hour after doors opened, dozens people of people were waiting at some banks in Beirut and other cities, Reuters witnesses said. At others, fewer were waiting.
The Association of Banks in Lebanon praised the public for acting “responsibly”. The Lebanese pound strengthened against the dollar on a parallel market that has emerged in recent months, three dealers said.
The central bank had promised not to impose capital controls when banks re-opened, measures that could hamper the currency inflows and investment Lebanon badly needs to weather its worst economic crisis since its 1975-90 civil war.
Though no formal controls were imposed, banks were telling customers they could not transfer funds abroad unless they were for paying loans, education, health, family support or commercial commitments, a customer and banking sources said.
Customers also encountered new limits on the amount of dollars they could withdraw from U.S. dollar accounts.
Walid Iskandarani, who was trying to cash a cheque for $4,538 at a branch of Blom Bank in the Hamra area, said he had been told he could only receive $2,500 of the amount immediately. “The situation is not normal,” he said.
One customer was told a letter would be needed from an overseas bank for a mortgage payment to be transferred abroad.
Another said he was charged $5 for withdrawing $1,000 from his dollar account with Blom Bank and was told the weekly withdrawal limit from the account had been capped at $2,500.
At two other banks, employees said customers seeking to withdraw a couple of thousand dollars would not encounter issues but those seeking to withdraw larger amounts would have to show it was for needs such as tuition or importing goods.
In the Corniche al-Mazraa of Beirut, Rana Sherif said she had been waiting at a branch of Bank Audi for an hour to withdraw money to pay her 13 employees. “I’m worried they won’t let me withdraw the full amount,” she said.
Several customers said they had expected the situation to be worse.
“There is not a lot of panic. I thought it was going to be more,” said a customer who was holding a ticket showing he was 17th in line outside a branch of Byblos Bank in Zouk Mosbeh, north of Beirut, where 20 people were waiting at opening time.
POUND STRENGTHENS ON PARALLEL MARKET
“The public is acting responsibly and in a civilized manner, and the sense of patriotism was clear in people’s desire to protect the national economy,” Salim Sfeir, the chairman of the Association of Banks in Lebanon, said in a statement.
Banks had cited security concerns for staff and customers in their decision to stay closed for the last two weeks. Bankers and analysts had also cited worries about a rush by savers to withdraw funds or to transfer them abroad once banks re-opened.
Banking sources said on Thursday that commercial banks would try to restrict transfers abroad. At another bank, a bank employee was overheard offering higher interest rates to another customer.
A slowdown in capital inflows to Lebanon has led to financial pressures unseen since the 1975-90 civil war. A parallel market has emerged for the Lebanese pound, which has been pegged at 1,507.5 to the dollar for two decades.
The pound strengthened on the parallel market on Friday. Two dealers said a dollar cost 1,700 pounds on Friday compared with 1,800 on Tuesday, when Saad al-Hariri resigned as prime minister. A third dealer said the dollar cost 1,650 pounds.
Hariri’s resignation met the demands of protesters, who were demonstrating against politicians they accused of rampant corruption
On Thursday night, President Michel Aoun signalled support for the formation of a government of technocrats, suggesting room for compromise towards setting up a new administration that could enact badly needed reforms.
REUTERS