Faced with protesters’ ire, Lebanon bank chief vows to protect currency

Faced with protesters’ ire, Lebanon bank chief vows to protect currency
In a long-awaited press conference, Lebanon’s central bank governor promised to protect deposits and keep the currency pegged to the dollar, while demonstrations rallied outside ahead of bank worker strikes.
2 min read
11 November, 2019
Protesters break down a security barrier in front of the central bank in Beirut [Getty]
Lebanon's central bank on Monday said it would strive to maintain the local currency's peg to the US dollar and ease access to hard currency after weeks of mass protests and economic deadlock.

As central bank chief Riad Salameh made a highly anticipated address to the press, dozens gathered outside to protest the country’s economic mismanagement, which they claim has brought on the deep-set crises.

During the conference, the protesters broke down a construction barrier protecting the entrance to the central bank.

For two decades, the Lebanese pound has been pegged at around 1,500 pounds to the dollar, with both currencies used interchangeably in daily life.

In-depth: Lebanon scrabbles to avert imminent economic collapse

But banks have gradually been reducing access to dollars since the end of the summer, sparking fears of devaluation as the unofficial exchange rate reached up to 1,800 pounds.

"The central bank's first and foremost goal is to protect the Lebanese pound's stability," Salameh told journalists at a press conference in the capital Beirut.

“If there are no dollars in the market, then we don't have an economy” Salameh said, adding that measures have been taken to protect depositors and banks.

Salameh added that he had asked local banks to lift restrictions imposed after mass protests broke out nationwide against the political class on October 17.

Three billion dollars were withdrawn from the country’s banks before the crisis, but Salameh claimed the money had been hoarded in peoples’ homes.

He said the central bank had asked banks to maintain the same ceilings on credit cards and allow customers to repay US dollar loans in the local currency, adding that there would be no capital controls because the country relies on the free movement of funds.

He added banks could borrow dollars from the central bank at a rate of 20 percent, but that money cannot be transferred abroad.

Lebanon’s Union of the Syndicates of Bank Employees announced a strike on Tuesday, blaming the crisis on the protests and angry customers.

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