An ATM in Lebanon. (Illustration photo by Philippe Hage Boutros/L'Orient-Le Jour/Archives)
The Banque du Liban (BDL) has asked Lebanese banks to pay clients benefiting from the withdrawal mechanisms established by its Circulars No. 158 and 166 the equivalent of two monthly withdrawals in November, in a security context marked by the war between Israel and Hezbollah.
The institution, led by interim governor Wassim Manssouri, is reiterating an exception that was first applied in October, but with three monthly withdrawals. In total, beneficiaries of these regulations have so far been eligible for five monthly payments.
When contacted, a high-ranking banking source, speaking anonymously, stated that they learned of the news through the media. "I suppose that the central bank will guarantee the additional monthly payment that the banks will make in November compared to what was already planned, similar to what happened in October," this source added. The BDL contributed to financing this measure in October, which led to a decrease in its reserves during the first half of the month, dropping from $10.6 billion to $10.3 billion.
As with the first announcement made in September, the BDL justified this new exception approved Thursday by its Central Council due to the "emergency conditions facing the country." The central bank also clarified that this exception would only be valid for one month and that the mechanisms would be applied again according to their initial terms starting in December.
Annual Cap
Applicable until June 2025, Circulars No. 158 and 166 instituted two mechanisms issued by the BDL since the outbreak of the banking crisis five years ago. They were aimed at partially compensating for the effects of the illegally imposed restrictions on accounts opened and funded before the end of 2019.
Circular No. 158, issued on June 8, 2021, allows "fresh" dollar withdrawals from bank accounts in foreign currencies opened before October 30, 2019, now considered "lollars" accounts. This mechanism has already been renewed three times. Depositors who adhered to the circular before June 30, 2023, could withdraw $400 per month (up to $4,800 per year and a total of $50,000), compared to $300 for those who opted to benefit from the circular after July 1, 2023, up to $3,600 per year.
Circular No. 166 of February 3, 2024, allows eligible depositors—those who do not benefit from Circular No. 158—to withdraw $150 "fresh" per month (up to a total limit of $4,350) from their accounts denominated in "lollars," and on sums deposited between October 31, 2019, and June 30, 2023. This has replaced another circular (No. 151, in effect from April 2020 to December 2023) that only allows small withdrawals in Lebanese pounds at an exchange rate well below the market rate.
In practical terms, beneficiaries of Circular No. 158 who adhered to the circular before June 30, 2023, could theoretically withdraw $1,200 at once in October following the first exemption implemented and are eligible to receive an additional $800 in November. Beneficiaries of the same mechanism who joined after June 30, 2023, could withdraw $900 in October and will be able to withdraw an additional $600 in November. Finally, beneficiaries of Circular No. 166 could withdraw $450 at once in October and will be able to withdraw $300.
The banking source specifies that if these five monthly payments disbursed over two months cause the beneficiary to exceed their annual limit before the 12 months from the first payment have elapsed, they may still be eligible for a payment in December if their total cap is not exceeded. They add that, in principle, there is nothing preventing an eligible client from registering in November and receiving two payments at once.
