Over $1 Billion Dollars Were Transferred Outside Lebanon During The Crisis

The governor of the Central Bank, Riad Salameh, said that, despite the capital control measures that have been in place since October, $1 billion dollars managed to be transferred abroad.

“Of the $1.6 billion that was withdrawn (from the Lebanese banking sector) between October 17 and the end of the year, $1 billion were transferred abroad by Lebanese,” he said to the France24 on January 30th in a TV interview.

The other $600 million taken out of the banks were capital deposits held by foreign banks.

The statements came amid rumors that politicians have been transferring funds abroad and that the bankers are complicit with the political class.

Ever since October, there have been restrictions on people’s access to money and, in addition, to their ability to transfer their money abroad. This raises the question as to how this newly reported $1 billion have managed to make it outside of the country.

Salameh added that the Central Bank will launch an investigation into the matter. He also noted that there had been reports of “politicians, senior civil servants, and bank owners” involved in transferring the fund outside of the country but that there would need to be an investigation in order to identify the people responsible.

A report by a Carnegie think-tank revealed that between October 15th and November 7th of last year, around $800 million had left Lebanon during a time where the banks were closed and people had limited access to their money.

When asked about what might have caused the crisis, Salameh spoke extensively about the impact of the Syrian refugee crisis, the resignation of Prime Minister Saad El-Hariri in 2017, and Lebanon evolving into what he called a “cash economy.”

He said that “when the banks closed after 17 October 2019, depositors lost a significant amount of trust in the banks” and that 10% of the cash supply was withdrawn from the banks and kept in homes and shops.

He also added that the official exchange rate will remain 1507.5LL per dollar despite the current market price of 2000LL per dollar.