Lebanon Businessnews News

Bank deposits drop
by $25 billion since August
Dollarization hits 79 percent

a 13-year record high

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Customer deposits in the banking sector dropped by $25.3 billion, or 15 percent, from the end of August 2019, when they first started declining, to the end of April 2020.

Deposits, which stood at $148 billion at the end of April, were declining as a result of the bank run that was triggered by concerns about the potential outcomes of the tough economic and financial crisis and the anti-government protests.

“Among the reasons for deposit contraction was a parallel contraction in loans within the context of a continuous deleveraging process,” Bank Audi said in its ‘Lebanon Weekly Monitor’.

The main decrease was in lira deposits, which plunged by $17.6 billion or 36 percent over the eight-month period to $31 billion. Foreign currency deposits dropped over the same period by six percent to $116 billion. As a result, the deposit dollarization ratio rose to a 13-year high of 79 percent, according to Bank Audi.

The banking sector’s loans have shrunk by $11 billion since the end of August 2019. The dollarization ratio of loans reached a record low of 65 percent.

Conversions to dollars are done at the official rate of LL1,507.5.
Reported by Shikrallah Nakhoul
Date Posted: Jun 10, 2020
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