Maintaining multiple exchange rates allows the banking sector to clean up its balance sheet as part of the financial crisis that started in 2019.
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He risks six months in prison and a fine, but he received extensive popular support. For a part of the Lebanese, Abdallah al-Sai has become a symbol of the drastic restrictions imposed by banks to depositors, on a fund of financial collapse. Equipped with a weapon and cans of gasoline to ignite, this milf briefly took hostage of bank employees, Tuesday, January 18, in the east of the country, and claimed that his savings are given. After gaining success, he went to the police.
The battle is now engaged for public opinion. A dozen lawyers have proposed to defend it, seeing in this gesture punch a consequence of the continuous degradation suffered by the Lebanese population. For their part, the banks are offended by the marks of solidarity testified to this man on social networks, and denounce an extortion by threats. Procedures are underway to constrain Mr. Al-Saï to return the $ 50,000 (44,000 euros) to his family.
Since the financial crisis has erupted, in the fall of 2019, violent actions against banks have remained isolated. But the anger and feeling of humiliation of the population, transformed brutally into an adjustment tool of the debacle, are immense. “I will be dead before the situation improves. Look at this neighborhood, formerly hyperactive, today at the judgment,” observed, discouraged, Hanane, a retiree, in front of a Bank of the Hamra district, in Beirut, than Workers bunkerize more with metal panels.
Saboordered life plan
No formal strategy has been introduced, to deal with economic and financial tumble, from the torpedoing of the rescue plan prepared by the former Government of Hassan Diab in 2020. The roadmap provided for a distribution of losses, including large applicants and shareholders of banks. The latter, refusing to put the hand in the pocket, had been on the front line to scop the initiative.
Since the Lebanese face the fluctuations of the local currency in the black market, and a multiplicity of exchange rates (the official, those of the bank withdrawals, that of the platform of the Bank of Lebanon (The Central Bank, BDL) and that of the black market). This situation allows a “haircut” (puncture on deposits) implicit, and leaves the strings of the game in the hands of the BDL. The unification of these rates is one of the challenges of the discussions that resumed with the International Monetary Fund, Monday, January 24, with a view to contracting a loan. Talks that raise concerns about becoming the accounts of small applicants, on which the “haircut” could intensify.
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