Lebanese Banks Just Cut By Half The Dollar Withdrawal Limit

The capital control measures that the banks have taken since October 2019 have only become tighter with most major banks opting to halve their dollar withdrawal limits.

Three major banks contacted by AFP confirmed that they will be capping their monthly withdrawal rate at $600 a month.

Bank Audi, for example, allowed its customers $300 every 15 days instead of every week. However, users with over $100,000 will receive $500, and those with $1 million will be allowed $1,000.

The new government is expected to announce a new rescue plan for the economy this week. The new plan is said to include measures such as reducing interest rates on loans.

Experts and demonstrators say that having to withdraw their money based on the plummeting Lebanese currency has amounted to what is essentially a de-facto “haircut.”

The capital control measures that the banks have been taking are considered illegal according to Article 670 of the Lebanese Penal Code which states:

“A suspect – be it a business or an individual – who withholds, disperses, embezzles, or misappropriates a victim’s deposit faces imprisonment of between two months to two years and a minimum fine of 50,000 Lebanese pounds.”

However, using his special powers as governor of BDL, Riad Salameh is seeking to legitimize these capital control measures.

This means that people won’t be able to take the banks to court and demand that they give them their hard-earned money. The finance ministry, however, has yet to respond to his request.

Although the currency is gradually losing its value, Salameh has insisted that the official exchange rate that would be withdrawn at the banks to remain at 1507.5 L.L.

This is despite the fact that Salameh had a meeting with the exchange houses to stabilize the currency at 2000 L.L. However, that measure was only temporary as the value plunged to 2200 L.L. only weeks later.