Banks attacked in Beirut as lira plummets to new lows, banking strike continues

Banks attacked in Beirut as lira plummets to new lows, banking strike continues
Anger boiled over on Thursday as economic conditions worsened and banks refused to open their doors.
3 min read
16 February, 2023
The Union for Depositors' in Lebanon said that it would sue the Association of Banks in Lebanon if it continued striking.

Protesters burned tires in front of two Beirut banks and demonstrated in front of the home of the head of the Association of Banks in Lebanon (ABL) as the Lebanese lira plunged past a new low of 80,000 lira to the US dollar on Thursday.

The Lebanese lira has lost 98 per cent of its value since the beginning of Lebanon's financial crisis in 2019, while salaries have remained virtually unchanged.

"It's been three years, we are tired of protesting. We just want our money, it came from my sweat. How could they have stolen it?" Simone Barak, a protester whose money is frozen in the bank, told The New Arab.

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Banks froze the accounts of small and medium depositors in 2019, before demonstrators poured out into the streets in October, essentially confiscating the savings of millions of Lebanese, allowing only small weekly withdrawals at a steeply discounted exchange rate.

The Lebanese government has said that it will protect the money of depositors but has not made a single significant financial reform since the beginning of the crisis considering that many of the ruling politicians are major shareholders. 

Security forces deployed in front of the ABL head's home and in front of banks in Beirut on Thursday, while the army deployed as a cautionary measure in the southern city of Saida.

Protesting taxi drivers also blocked roads across Tripoli and Beirut on Wednesday night in protest of the declining Lira, culminating in armed clashes in Tripoli.

Banks in Lebanon have been shut to ordinary depositors since 7 February, as the ABL holds a strike to retaliate against what it calls "haphazard targeting" of banks by the Lebanese judiciary.

Lebanon's judiciary has ordered Fransabank to repay a depositor in cash, rather than a check which cannot be cashed for its full value.

Lebanese Judge Ghada Aoun also charged several chairmen of banks and requested several banks to lift banking secrecy so that certain accounts may be examined.

As a result of the banking strike, many Lebanese have been unable to withdraw or deposit any money into their bank accounts.

"We are sending the judiciary a message to implement its decisions. We need cash in depositors' hands now," Rami Ollaik, a lawyer and founder of United Against Corruption Lebanon, told TNA.

"The same charade that's happening with the port blast case is happening with the banks. They are filing disputes with judges to tamper with their decisions," Ollaik said, alluding to the lawsuits filed against the judge in charge of the 4 August port blast case, which stalled his investigation.

The Depositors' Union threatened on Tuesday that it would file a lawsuit to oblige banks to reopen if they continue their strike.

"What the banks are doing right now is actually an act of blackmailing of the judiciary, they wanted to show if there is no banking sector, the country would be on hold," Dina Abu Zour, a lawyer with the Depositors' Union, told TNA.

"It's the depositors who are most affected by this, no one else," Abu Zour said.

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Lebanon has witnessed an unprecedented decline in living standards since the beginning of its financial crisis, with over two-thirds of its population plunged into poverty.

The International Monetary Fund (IMF) has promised financial aid for Lebanon – a key step towards regaining international confidence – if it passes crucial economic reforms.

Despite reformist rhetoric, successive governments in Lebanon have been unable to pass any of the financial reforms necessary to unlock IMF aid.