Lebanon Businessnews News

$12 billion drop
in bank deposits
$2 billion increase in

residents’ foreign currency savings

Share     Share on Facebook     Share on LinkedIn    
Customer deposits at commercial banks decreased by $12 billion or seven percent during the first 11 months of 2019, according to the Central Bank (BDL). They stood at $161.2 billion at the end of November.

Most of the decline, $10.1 billion, consisted of deposits denominated in lira, as banks have been imposing tighter restrictions on dollar withdrawals. Lira deposits plummeted by 20 percent to the equivalent of $40.7 billion over the 11-month period.

Most of the decrease in deposits was recorded during the last three months of the period as confidence of depositors continued to wane with political gridlock resulting in the inability to form a government, and the banks’ de facto capital control measures. The negative momentum of panic led to a $5.7 billion drop in deposits in November alone. Most of deposit withdrawals during the current crisis are being hoarded at homes, according to Riad Salameh, Governor of BDL.

Global investment bank Goldman Sachs said in a report released in December: “Sustained net capital outflows in the balance of payments have led to a sharp deterioration in the foreign exchange liquidity position of the monetary sector over the past few years. This has eroded already weakening depositor confidence and necessitated the implementation of de facto capital controls.”

Source:Central Bank

Non-resident deposits also witnessed a significant decline. They fell by 12 percent over the same period to $33.2 billion.

The only category of deposits that didn’t decrease during the 11-month period was resident deposits in foreign currencies which increased by two percent ($1.8 billion) to $90.8 billion.
Reported by Shikrallah Nakhoul
Date Posted: Jan 09, 2020
Share     Share on Facebook     Share on LinkedIn