On Sunday, the Lebanese Central Bank (BDL) announced an unexpected initiative that it said would “relieve” the Lebanese people by allowing them to access their frozen deposits in foreign currency.
In a statement, the Banque du Liban (BDL) said it was working on launching a plan that would stipulate the gradual unlocking of the deposits that were active before October 2019.
The plan, which conforms with the laws and principles that govern the work of the BDL, would also “restore Lebanon’s Arab and international relations, and internal and external trust,” despite the prevailing crisis and the lack of a rescue government, the BDL said.
What Is the Plan?
The BDL explained in the statement that it was negotiating with Lebanese banks to adopt a mechanism that would have banks gradually pay back the deposits that were active before October 17th, 2019. The deposits would be released “in all currencies.”
For this reason, the BDL has asked banks to provide it with the needed data to build this plan.
Amounts upwards of $25,000, in U.S. dollars or any other foreign currency, would be paid to account holders in accordance with the initiative, in addition to the equivalent of each amount in Lebanese pounds.
The payments would be installed over a period of time that will be specified by the BDL soon.
The BDL expects that the plan will take effect starting June 30th, provided that it receives the necessary legal coverage.
As part of the same initiative, the Central Bank announced “SAYRAFA,” a currency exchange platform that will bring together banks and licensed money changers in Lebanon and ensure transparency in the exchange rate of the Lebanese pound against the U.S. dollar.
The details of the platform will be announced when the BDL receives the answer of the Finance Minister on the matter.
“The Banque du Liban will intervene when necessary to control fluctuations in the exchange market prices, bearing in mind that the rate will be determined by market movement, which will be open to individuals and institutions.”
Notably, the BDL also affirmed in the statement that it continues to provide U.S. dollars to banks on the official exchange rate.
It added that a letter had been sent to the concerned ministries, to ration subsidies, “in order to preserve the continuity of the subsidy approach, as required by the higher Lebanese interest and the interest of the depositors, and in compliance with the Code of Money and Credit.”