The headquarters of the Banque du Liban in Hamra. Photo Joao Sousa
Despite being extended 15 times since it was first issued in December 2021, Banque du Liban’s Circular no 161, which is set to expire at the end of April, was not renewed this month.
This circular established one of the main mechanisms that upheld the illegal banking restrictions imposed by the central bank since 2019.
It allowed depositors — individuals, civil servants and companies — to convert Lebanese lira into dollars at BDL’s Sayrafa rate, which is lower than that of the black market. It therefore served as a roundabout way to obtain subsidized dollars.
Since early 2023, civil servants were given a preferential rate when withdrawing their salaries in dollars. This rate was set at LL60,000 for this month’s salary withdrawals. BDL’s press office told L’Orient-Le Jour that it has not renewed the circular and does not plan to do so, adding that the effects of the circular for civil servants will remain in effect.
Yesterday, caretaker Prime Minister Najib Mikati issued a decision to form a committee headed by caretaker Deputy Prime Minister Saade Chami and composed of various representatives of public institutions, including BDL, the Finance Ministry and the Central Inspection Board.
This committee is tasked with studying the effects of the crisis and the depreciation of the lira (which lost over 98 percent of its value in the last three years) and to reactivate and reform the public sector which has been staging regular strikes.
This decision comes two weeks after the cabinet approved the increase of private sector workers' minimum wage to LL9 million lira as well as a temporary wage increase of public sector’s employees. Both increases are to take effect this month. Civil servants will therefore receive an addition equivalent to four times their basic salary applicable before the state budget for 2022 enters into force. Civil servants have already been receiving a supplement equivalent to two basic salaries since the beginning of the year.
This article was originally published in French in L'Orient-Le Jour. Translation by Joelle El Khoury.