Lebanon Edges Away from Its Decades-Old Peg for Small Deposits

Lebanon said it will allow small depositors to withdraw funds from dollar accounts at a weaker rate than the decades-old fixed regime, the first official move away from the country’s currency peg amid a severe liquidity crisis, Bloomberg News reported. With hardly any dollars circulating in the banking system, lenders will pay out at a “market rate” in Lebanese pounds to clients with accounts of up to $3,000, according to a central bank circular issued Friday. The rate will be set daily via an electronic platform including local lenders, the central bank and exchange bureaus, according to a separate statement. Customers must empty their account in one go, and the scheme will run for three months. Separately, clients holding accounts in Lebanese pounds equivalent to $3,000 can transfer the amount into foreign currency at the fixed rate of 1,515 pounds to a dollar, and then withdraw at the new market rate, so they aren’t at a disadvantage. Read more