External bank transfers and forex pricing resume. Beirut Stock Exchange halts trading due to Central Bank employee strike - Lebanon

External bank transfers
and forex pricing resume
Beirut Stock Exchange halts trading

due to Central Bank employee strike

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The Central Bank (BDL) will carry out transactions pertaining to incoming external transfers to the private and public sectors during the ongoing strike of its employees.

This decision resulted from an agreement reached between Governor of BDL Riad Salameh and the union of BDL’s employees.

Both parties have decided that BDL will resume foreign exchange operations as well as official pricing of the exchange value of the lira against the U.S. dollar and other foreign currencies.

The strike has paralyzed domestic transfers among banks, local lending operations, checks, and other internal operations carried out through BDL.

Automatic teller machines (ATMs) of the banks were not affected by the strike.

The Beirut Stock Exchange (BSE) said it has suspended trading till further notice due to the strike carried out by BDL employees.

Midclear cannot perform the clearance and settlement of transactions executed at the BSE on time during the strike, said Ghalib Mahmassani, Acting Chairman of the stock exchange committee.

Midclear, which is owned by the Central Bank, provides clearing, custodian, and safekeeping services of financial instruments.

The move aims to protect the interests of investors, he said.

BDL employees and some public sector personnel are engaged in strikes to protest against austerity measures proposed by the Ministry of Finance in the 2019 draft budget.

The employees of the Central Bank demand that the clauses that are detrimental to their rights and that are included in the draft budget must be revoked as a precondition for ending their open strike. BDL is an autonomous monetary authority that has financial independence.

Ali Hassan Khalil, Minister of Finance, said that BDL’s employees are not targeted in the 2019 draft budget and that the ministry insists on raising the tax on interest income to ten percent from seven percent.

Joseph Torbey, Chairman of the Association of Banks, said last week that the proposed increase in the tax on interest income would negatively affect capital inflows.

The draft budget aims to reduce the deficit to less than nine percent of GDP from 11.2 percent in 2018.
Reported by Shikrallah Nakhoul
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Date Posted: May 06, 2019