Lebanon's banks begin three-day strike after armed raids

It comes as the Lebanese pound slips to a record low against the US dollar on the black market

Beta V.1.0 - Powered by automated translation

Banks in Lebanon on Monday began a three-day strike amid security fears after seven banks were held up last week by angry depositors unable to withdraw their trapped life savings.

The protest action came as the local currency plunged to a new low against the dollar on the black market, as Lebanon grapples with an economic crisis that has been described by the World Bank as one of the worst in modern history.

On Monday morning, protesters demonstrated outside the justice palace in Beirut in support of two accomplices of one of those who carried out a bank heist last week. Clashes broke out between protesters and security personnel standing guard.

The two men, Abdel Rahman Zakaria and Mohamed Rustom, remain detained over their support for Sali Hafez, who held up a bank branch with a toy gun in Beirut’s Sodeco neighbourhood and demanded access to her savings.

She made off with around $13,000 and has been heralded by some as a hero — as have others who have carried out similar actions.

In 2019, banks imposed informal capital controls, severely restricting access to hard currency and compounding the economic difficulties faced by people in Lebanon.

It has forced some desperate depositors to take matters into their hands in a bid to get hold of their money.

Last Friday alone, five banks in Lebanon were stormed by depositors who wanted to withdraw their frozen funds.

In response, a three-day banking sector strike was announced starting on Monday — although there were reports that a handful of branches had remained open.

Speaking after an emergency meeting last week, Interior Minister Bassam Mawlawi gave a warning that “reclaiming rights in this way … can break the system and make the rest of the depositors lose their rights”.

A devastating economic collapse that first became apparent in 2019 has plunged much of Lebanon into poverty, with the Lebanon pound losing more than 90 per cent of its value.

On Monday, websites that monitor the exchange rate on the black market showed that the Lebanese pound was selling at about 38,600 to the US dollar.

Lebanon is also suffering from widespread shortages of basic essentials including medicine, water, electricity and bread.

The country is seeking a bailout from the International Monetary Fund, but has so far failed to put in place the far-reaching reforms that the IMF requires.

An IMF delegation is expected to arrive in Lebanon on Monday to follow up on the reforms after a staff-level agreement in April on a $3 billion loan programme.

“There has been slow progress in implementing some of the critical actions that we think are required to move forward with a programme,” IMF spokesman Gerry Rice said last week.

Updated: September 19, 2022, 12:50 PM
NEWSLETTERS
MORE FROM THE NATIONAL