BEIRUT: The Association of Banks in Lebanon agreed a set of temporary directives for commercial banks including a $1,000 cap on weekly withdrawals from US dollar accounts, the association said on Sunday, amid a worsening economic and political crisis.
The measures were to “facilitate, standardise and regulate” the work of bank employees in light of the country’s “exceptional circumstances,” it said, following nationwide protests that have kept banks shut for most of the last month.
The directives included permitting hard currency transfers abroad only to cover “urgent personal expenses.” It said in a statement the measures did not represent restrictions on the movement of money and came in consultation with Lebanon’s central bank.
Lebanon’s bank staff union said it would extend to Monday a nationwide strike that began a week ago and which has kept banks shut. The union is set to meet on Monday to discuss a security plan intended to keep branches safe and allow them to reopen.
The central bank has not set formal capital controls, despite fears of a rush on deposits and pressure on the pegged Lebanese pound in the informal market.
Banks have been shut for much of the time since protests erupted on Oct. 17. They briefly reopened this month but imposed strict controls on transfers abroad and caps on hard currency withdrawals, with each commercial bank appearing to set its own policy.
Global ratings agency S&P lowered Lebanon’s foreign and local currency sovereign credit rating on Friday to ‘CCC/C’ from ‘B-/B amid concerns about depositor confidence and the reported restrictions on currency flows.