There has been a lot of talk recently about the possibility of the Bank of Lebanon increasing the value of monthly withdrawals for depositors in accordance with Circulars 158 and 166, but this proposal has sparked widespread controversy, because the amounts that will be disbursed according to these two circulars are expected to be calculated from depositors’ accounts and automatically deducted from any future payments due to them.
In this context, economic and financial expert Dr. Bilal Alama explained via “Lebanon 24” that “linking the increase in withdrawals to their calculation from the original deposits is a legitimate demand, but the conditions that are set to achieve this aim to not increase the monetary supply in the market and prevent any pressure on the price of the dollar.”
He added: “The decision to increase monthly withdrawals for depositors, in my opinion, was taken by 90 percent, and currently the impact of this matter on the exchange rate is being investigated, so conditions are being set with an attempt to restrict the issue as much as possible, but in order to cover the inflation difference, withdrawals must be increased, and this condition is set by the banks. In return, the state also sets its own conditions, the most important of which is that this money is not paid in cash.”
Alama pointed out, “A short time ago, the remaining deposits were counted and a plan was prepared to return them, which was called the “Financial Balance Plan.” Based on this calculation, all the payments that were paid previously were not noticeable, and therefore the deposit numbers remained the same as they were at the beginning of February. At that time, an external account was opened in which the funds were placed and paid in batches to liquidate the deposits.”
He went on to say: “But now, in the event of an increase in withdrawals, depositors may cling to the numbers that were received before February 1st and consider that this money has nothing to do with the balances that were determined. Therefore, the banks stress that these funds be noted in the increase in withdrawals, meaning that they are counted from the original deposits that were allocated on February 1st through the financial balance and economic recovery plan.”
