BDL extends lollar withdrawal rate, MP vows to challenge

BEIRUT — Banque du Liban on Wednesday extended the LL3,900 withdrawal rate for so-called lollars stuck in banks until Jan. 31, 2022, prompting a potential challenge from MPs.

Here’s what we know:

    • The rate, established by BDL Circular 151, had been set to expire Thursday.

    • But the central bank said changing the withdrawal rate in the absence of comprehensive reforms would have “significant repercussions” on the money supply and the currency exchange rate.

    • Therefore, the bank said, an extension was made in order to give the new government time to “present its reform project.”

    • Following a meeting of Parliament’s Finance and Budget Committee on Monday, chair Ibrahim Kanaan (FPM/Metn) said that BDL had told the committee it wanted until the end of the year to study a potential replacement withdrawal rate, which a BDL spokesperson neither confirmed nor denied.

    • In response to today’s extension, Kanaan told L’Orient Today he would ask the Finance Ministry to invoke its authority under the Code of Money and Credit to veto BDL circulars that are “contrary to the law and regulations.” It is unclear whether the ministry would cooperate with this request.

    • In a statement, the Association of Depositors in Lebanon called on all depositors to hold sit-ins in front of commercial banks and branches of BDL starting tomorrow, and called for a sit-in at BDL headquarters next Wednesday.

    • Circular 151 was issued in April 2020 and was previously extended for a period of six months by a March 2021 circular.