There is “no will” among those concerned to formulate final solutions, and to put in place a clear, scientific mechanism for returning people’s deposits. With this phrase, the head of the Finance and Budget Committee, Representative Ibrahim Kanaan, sums up, in his speech to Al-Modon, the reason for the failure of the Finance Committee’s meetings with the Banque du Liban and banks to reach solutions at the level of deposits. He says: All that the Bank of Lebanon asked for is limited to providing us with a future plan that answers people’s questions about the fate of their deposits and the date and mechanism for their payment.
Kanaan refuses to enter numbers and exchange rates to calculate bank deposits. He stresses that talking about a new exchange rate as an alternative to the 3900 pounds currently in force according to Circular 151 will not fulfill people’s rights, whatever the proposed number: “Therefore, what is required today is a clear plan that stops the evaporation of deposits and avoids depositors further losses. And most importantly, a plan is required. It explains to depositors how and when they will recover their deposits.
Consumption of Lebanon “Destroy“
What happened today is that the Banque du Liban once again asked for a respite to put in place that plan. Today, he insisted on giving him an additional 3 months. This means that the Banque du Liban intends to extend the application period of Circular 151 in its current form, that is, by calculating the dollar exchange rate at 3,900 pounds for an additional three months until the end of this year, without regard for what Circular 151 deducts from depositors’ funds.
The request of the Banque du Liban to grant him an additional 3 months was rejected by the Finance and Budget Committee. In his speech, Kanaan clarifies that it is not possible to extend the validity of Circular 151 without it being accompanied by a clear action plan that restores people’s rights. To confront the Banque du Liban’s disregard for the matter, the Finance Committee decided to go to the government, carrying Minister of Finance Youssef Khalil a message to the government that “the need to exercise the guardianship authority of the Minister of Finance over the Bank of Lebanon, and to use his powers entrusted to him under Article 43 of the Monetary and Credit Law, which gives him the power to stop circulars.” The Banque du Liban, in the event that it sees violations, especially that the rights of depositors are more constitutional than legal rights.
Circular Engineer 151
The high-worded letter of the Finance Committee to the government, through the Minister of Finance, does not suggest the seriousness of the matter. Nor does it foreshadow the possibility of the Minister of Finance using his powers under the Money and Credit Law. The Minister of Finance is nothing but the former director of operations at the Banque du Liban, and only a few weeks have passed since he left his position at the Banque du Liban, while the Banque du Liban, according to Circular 151, has been nibbling people’s deposits for a year and a half, which means that the current Minister of Finance is simply the architect of the circular. 151 previously, by virtue of his previous position at the Banque du Liban, so is it expected from him to stop the effect of the circular today?
Banking sources suggested extending Circular 151 according to the exchange rate of 3900 pounds to the dollar, while the aforementioned circular was issued a year and a half ago, when the dollar exchange rate was 7000 pounds, and it did not change even when the exchange rate on the black market reached the level of 25000 pounds to the dollar, before the return of Its decrease to the vicinity of 16 thousand pounds currently.
The source reports that the Banque du Liban is delaying raising the exchange rate of bank withdrawals, as part of a policy to curb the money supply in pounds in the market. In order to reduce the demand for dollars on the black market. As for the reason for the delay of the Banque du Liban, it is no more than an unjustified pretext for the robbery of people’s wealth. From here, the Association of Depositors believes that the continuation of the policy of nibbling and deducting deposits is not absurd. Rather, it is deliberate, and it falls within the framework of a financial plan that aims to incur the vast majority of depositors with major losses, in order to protect the minority of them.