Abu Dhabi, UAETuesday 1 December 2020

Syria's Assad says billions locked in Lebanese banks because of economic crisis

Syrians have lost access to $20bn-$42bn of deposits, president says

Syrian President Bashar Al Assad said his countrymen had billions of dollars in deposits tied up by Lebanon's economic crisis. AP
Syrian President Bashar Al Assad said his countrymen had billions of dollars in deposits tied up by Lebanon's economic crisis. AP

Syrian President Bashar Al Assad said a block on billions of dollars of deposits held by his countrymen in Lebanon's financial sector put in place after a financial crisis there was a main cause of Syria's economic problems.

Lebanese banks, fearing capital flight and grappling with an acute hard currency crunch, imposed tight controls on withdrawals and transfers abroad last year, angering local and foreign depositors who are unable to get access to their savings.

Mr Al Assad said between $20 billion and $42bn of Syrian deposits could have been lost in a banking sector that held more than $170bn in foreign currency deposits.

"This figure for an economy like Syria is terrifying," he said

"It's the money they put in Lebanese banks and we paid the price – this is the core of the problem that no one talks about," Mr Assad added, speaking during a tour of a trade fair broadcast on state media.

Syrian businessmen said Lebanon's tight controls on withdrawals have locked hundreds of millions of dollars needed to import basic goods from oil to commodities.

Many Syrian front companies had also long circumvented western sanctions by using Lebanon's banking system to import illicit goods into Syria by land, bankers and businessmen said.

The US Treasury has blacklisted scores of such firms.

Mr Al Assad said woes were not caused by the Caesar Act, the toughest US sanctions yet against Damascus which came into force last June.

"The crisis began before the Caesar Act and years after long-imposed western sanctions ... It's the money [in Lebanese banks] that has been lost," he said.

Syrian authorities blame western sanctions for widespread hardship in the country, where the currency's collapse since the start of the year has pushed up prices and left ordinary people struggling to afford food and basic supplies.

Last month, the government faced severe fuel shortages and has been forced to raise bread prices as wheat stocks dwindle, leading to growing unrest in a weary population battered by nearly a decade of war.

Updated: November 5, 2020 01:02 PM

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