Lebanon .. Growing concern of depositors on their savings

Lebanese banks' liquidity restrictions are fueling concerns among depositors who fear for their savings, despite government assurances that they are safe from the country's worst financial crisis since the 1975-1990 civil war.

Protests have been sweeping Lebanon since October 17, putting more pressure on the financial system and deepening a hard currency crisis that prevents many importers from bringing in goods, pushing prices up and raising fears of a financial meltdown.

The banks' response, which has restricted foreign currency withdrawal limits and almost halted all remittances abroad, has come in with heavy fog on many depositors.

"There is anxiety, a big concern," said the 66-year-old retiree - whose foreign currency savings are the fruit of his 17 years abroad.

"We are in a big crisis, and I'm very worried about my savings."

In an interview with Reuters last week, the president of the Association of Banks in Lebanon described the restrictions as a "barrier to protect the system" until things return to normal. The Central Bank of Lebanon said the deposits were safe.

Concerns are growing, however, that dollar restrictions have been further tightened since they came into effect on November 1.

BLOM Bank, one of Lebanon's largest banks, has gradually lowered its weekly maximum withdrawal limit from $ 2,500 to $ 500 this week for depositors with accounts under $ 100,000. At Bank Audi, the maximum is $ 300.

"I don't trust the government when it says my money is safe in the banks, because it is not credible; that's what we found," said another applicant.

"People pull money every week, as much as the bank allows them. The problem is that banks don't know how long this crisis will last, so they take into account the desire to continue as much as possible," said Marwan Mikhail, head of research at Bloom Invest.

Puzzled
Some depositors said they would withdraw the rest of their savings if they could, regretting that they had not done so in advance.

"We are very confused; I don't know what is safe and what is not safe," one depositor said, adding that the maximum $ 500 per week draw barely covered his needs.

"The bank makes you feel begging for an owner; I doubt the Lebanese will return to putting their money in the banks," said another applicant who had to prove he needed to buy medicine for his mother to withdraw $ 1,000.

The protests triggered by anger from a ruling class seen by protesters plundering Lebanon have slowed an already weak economy, and many companies have laid off workers or cut wages and part-time workers.

Lebanon has one of the highest levels of public debt in the world, and its foreign exchange reserves are expected to come under further pressure this week when a $ 1.5 billion international bond matures.