Lebanon Will Not Let Banks Fail Amid Worsening Economic Crisis - Central Bank Head

BEIRUT (Pakistan Point News / Sputnik - 29th April, 2020) Lebanon's financial authorities have taken necessary measures to keep the country's banks out of bankruptcy despite a deteriorating economic situation, Riad Salame, the head of the country's central bank, said on Wednesday.

Late on Sunday, after a two-month COVID-19 respite, mass protests resumed throughout the country despite the state of emergency declared on March 16 and set to last until May 11. Crowds protested against the worsening economic situation caused by the economic and financial crises that Lebanon has been going through since October. Demonstrators blocked roads and threw Molotov cocktails at bank offices across Lebanon, as the national Currency hit another low.

"We have no plans to bankrupt banks. This is done for the sake of depositors, who can lose all of their savings in case of failure," Salame said, adding that Lebanese banks have fulfilled the needed requirements, and were now trying to raise their capital.

Salame also commented on the recent statement of Prime Minister Hassan Diab, who said that a total of $5.7 billion was withdrawn from the Lebanese bank sector since the end of 2019 amid the crisis.

"Actually, [we are talking] about $5.9 billion. Among the total, $3.7 billion was used to repay loans, [and] two billion and 200 million Dollars were withdrawn in cash from customer accounts," the head noted.

Salame said that the authorities could avoid a misunderstanding if there were preliminary consultations between Diab's advisers and the central bank's representatives.

On Monday, the Lebanese armed forces mobilized its units in the northern city of Tripoli amid the recently resumed anti-government protests. Prior to this, the country's army command said that over 50 Lebanese military members were injured in clashes with demonstrators in the cities of Tripoli and Akkar, as well as in the Bekaa Valley.