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07 Jan 2020 | 07:59 AM UTC

Lebanon: Bank closures reported in Akkar January 4 /update 67

Bank closures reported in Akkar following clashes between client and staff January 4; situation likely to persist over the coming days

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LBN

Event

The Association of Banks asked all bank agencies in Akkar to remain closed until further notice on Saturday, January 4, after a 10-hour long standoff between angry clients and staff were reported in the city of Halba on Friday, January 3. The standoff prompted police to fire teargas inside the agency to disperse crowds. The incident was reportedly triggered by an ongoing liquidity crisis and the related restriction on currency withdrawal implemented in several banks. The situation is exacerbated by banks recently announcing additional restrictions, now on withdrawals in Lebanese pounds as well.

Further bank closures and incidents related to the ongoing liquidity crisis are likely over the near term.

Context

Several Lebanese banks have been restricting the limit of local and foreign currencies transfer and withdrawal since September 2019, triggering a liquidity crisis.

On October 16-17, the government approved tax hikes on tobacco products and a daily tax on messages and calls done via the WhatsApp mobile phone messenger application. The announcement sparked mass protests across the country on October 17, forcing the government to revoke the tax proposal. Since, protests have evolved, calling for the resignation of the government and have continued despite an emergency reform package announced by Prime Minister Saad Hariri on October 21. On October 29, Prime Minister Saad Hariri announced his resignation. On December 19, President Michel Aoun designated former education minister Hassan Diab to serve as the next prime minister.

Advice

Individuals in Lebanon are advised to monitor developments to the situation, anticipate business disruptions, and adhere to instructions issued by local authorities.