Bank raids return as Lebanese confront economic crisis

Two attempted bank holdups and a sit-in protest on Wednesday highlighted the growing desperation of Lebanese people grappling with the country’s worsening economic crisis. (Reuters/File)

• 3 incidents in single day raise fears of growing unrest
• Lebanon is in the grip of what the World Bank believes could rank among the top three financial crises in modern history

BEIRUT: Two attempted bank holdups and a sit-in protest on Wednesday highlighted the growing desperation of Lebanese people grappling with the country’s worsening economic crisis.
Bank raids by depositors demanding their money have been relatively infrequent during the past two months, but a string of incidents in recent days has again raised fears of growing unrest.
In the third action against a bank in a single day, Amina Mohammad broke into a branch of the Intercontinental Bank of Lebanon in Tripoli demanding access to her savings to pay for an operation for her elderly mother.
The bank was forced to close its doors while staff negotiated with Mohammad and her mother.
Earlier, a former soldier, Rida Rida, stormed into a branch of Bank Audi in Tyre, southern Lebanon, demanding his $15,000 deposit to pay for cancer treatment for his mother.
Patrols from army intelligence and the security were sent to the bank while Rida outlined his demands to the bank’s manager.
In the first incident of the day, Anis Tannous staged a sit-in outside the Societe Generale de Banque au Liban branch in Amioun, northern Lebanon, stopping people from entering or leaving the bank.
Tannous demanded the bank transfer his son’s university tuition fee to the US.
Two days ago, another depositor, Hussein Ramadan, and his mother stormed into the Al-Baraka Bank in Hamra, Beirut, in a bid to reclaim $132,000 in savings. After hours of negotiations, the bank agreed to pay the pair $15,000.
The dismissal of employees has taken a tragic turn, too, with one man attempting to commit suicide using a military weapon in front of his former workplace in Jnah in Beirut’s southern suburbs. Security forces arrived immediately and detained the man.
Lebanon is in the grip of what the World Bank believes could rank among the top three financial crises in modern history.
Meanwhile, caretaker Finance Minister Youssef Khalil said on Wednesday that his ministry will start calculating foreign exchange rates for taxes and fees collected by the customs department on imported goods based on the exchange rate of 15,000 Lebanese pounds to the dollar as of Dec. 1, a few weeks before the start of the holiday season.
The measure will “help limit the exploitation of price differences, and reduce the distortions and losses incurred by the treasury,” he said.
Observers believe that traders anticipated this measure by storing hundreds of tons of goods imported under exchange rate in place before the onset of Lebanon’s economic woes.
The rate at that time was 1,500 Lebanese pounds to the dollar.
Imports in the first seven months of this year alone totalled $10.5 billion, while total imports for the year are expected to reach $18 billion — a record approaching pre-crisis levels.
Last year import activity totalled $13.6 billion, a surprising figure in a country facing collapse and a high poverty rate, and begging the International Monetary Fund for $3 billion.
Lebanese are convinced that the government, particularly the Ministry of Economy and Trade, is unable to control the price of goods after the application of the customs dollar to duties and taxes, resulting in exploitation by traders.
Revenues of goods, for which duties and taxes are paid by consumers, will go into traders’ pockets rather than the treasury, many say.
Riad Salameh, the central bank governor, said on Monday that the bank will adopt an exchange rate of 15,000 Lebanese pounds to the dollar from Feb. 1 as part of a process to unify the country’s multiple exchange-rate system.
Commenting on whether the measure will lead to an increase or decrease in the exchange rate, Salameh said: “This will be determined by the market according to supply and demand, but the central bank will be on the lookout.”
MP Michel Daher said that “strict measures should be taken to absorb the excess liquidity that may be caused by the decision to increase the exchange rate.”
He warned “the exchange rate will skyrocket to over LBP 75,000 if it is accompanied by an ongoing presidential vacuum.”
According to bank data, Lebanese withdrew about $70 billion, mostly from small and medium-sized accounts, between 2019 and 2021.