Lebanon’s commercial banks have been told to limit weekly withdrawals from US dollar accounts to $1,000 in a set of temporary directives issued by Lebanon’s banking association on Sunday.

 

The transfer of hard currency abroad should be only to cover “urgent personal expenses,” stated the temporary directives issued by the Association of Banks in Lebanon on Sunday, amid a worsening economic and political crisis.

 

In a statement, the association said that that the measures are to “facilitate, standardize, and regulate” the work of employees in the sector as the protest-hit country undergoes “exceptional circumstances,” adding that the directives had been issued after consultations with Lebanon’s central bank, Banque du Liban.

 

It also encouraged customers to use credit cards in Lebanese pounds, while adding that the measures do not represent restrictions on the circulation of transfers, checks, or the use of credit cards within the country.

 

Lebanon’s month-long protests have closed banks, blocked transport routes and reduced the availability of cash, creating a perilous environment for small businesses, owners recently told Al Arabiya English.

 

Protesters, who were initially motivated by discontent over the economy and alleged corruption, are calling for the Lebanese government to step down and hold early elections. The prolonged disruption across the country, however, has hit the economy, leaving many salaries unpaid, imported goods at risk, and families with less money sent from relatives abroad.

 

Banks across Lebanon have been shut for the majority of the period since protests erupted on October 17, opening briefly before shutting down again on November 12 in a nationwide strike announced by the banking union. The lenders have maintained strict controls on the transfer of funds and withdrawals.

 

On November 15, S&P Global Ratings said that it had lowered Lebanon’s long-term and short-term foreign and local currency sovereign credit ratings to ‘CCC/C’ from ‘B-/B’, citing rising financial and monetary risks.

 

The ratings agency earlier also lowered the ratings on three Lebanese banks – Bank Audi, Blom Bank and Bankmed – further into junk, citing rising liquidity pressures.