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Lebanon's banks see no 'extraordinary movement' of money on reopening

November 3, 2019 at 10:53 am

Demonstrators draw graffitis to show their support and to express their reaction as part of anti-government protests, in Beirut, Lebanon on November 02, 2019 [Mahmut Geldi / Anadolu Agency]

Lebanon’s banks did not see “any extraordinary movement” of money on Friday or Saturday, the first two days they reopened to the public after a two-week closure due to nationwide protests, Reuters reported the head of the banking association as saying on Saturday.

“The reaction was almost the way we expected and anticipated. However, people were asking a lot of questions and we provided as much assurances as possible,” Salim Sfeir, head of the Association of Banks in Lebanon, told Reuters by email.

Central bank Governor Riad Salameh said the reopening of banks “in general … did not cause any disturbance at any bank”.

“This is important given the long period of shut down and the events our country went through,” he told Reuters in written comments.

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

The nationwide protests that erupted on October 17 tipped Lebanon into political turmoil as it grapples with the worst economic crisis since the 1975-90 civil war. The uprisings led Saad al-Hariri to quit as prime minister this week.

“We are trying to counter rumours and avoid panic in order to prevent any unnecessary and unjustified withdrawals,” Sfeir said.

When banks opened their doors on Friday, no formal capital controls were imposed, but customers encountered new curbs on transfers abroad and withdrawals from US dollar accounts, bankers and customers said.

“No formal capital controls are considered,” Salameh said on Saturday, adding that such a move would require a vote in parliament.

“The banks are professionally handling [the situation] and the central bank is backing them,” he said.

A banking source said branch operations so far had been “better than expected”.

Amid rain, protest activity was low on Saturday, but there were calls on social media for gatherings later in the day.

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