The BDL implements updates to Circular 158, modifying withdrawal options

The Banque du Liban (BDL) has announced updates to Circular 158. The original circular granted individuals the right to withdraw $400 in cash and an additional $400 in Lebanese lira at LBP 15,000 per dollar.

Under the revised amendments, withdrawals will now be limited to $400 in cash only, effectively halting the indirect exchange practices previously employed by banks.

Consequently, those withdrawing $400 in cash and $400 in Lebanese lira at the fixed rate of LBP 15,000 per dollar can now only withdraw the $400 in cash per month. So, the Lebanese lira part has been eliminated.

While the reduced withdrawal amount may seem concerning, it is worth noting that the portion previously withdrawn in Lebanese lira at the fixed rate of LBP 15,000 per dollar resulted in substantial losses, considering the current market exchange rate, which hovers around LBP 100,000 per dollar.

The removal of the Lebanese lira part from Circular 158 is a strategic move by the BDL to alleviate the liquidity of LBP in the market, thereby reducing pressure on the dollar exchange rate.

Sources familiar with the matter have confirmed that these conditions apply to current participants of Circular 158. As for new participants, the BDL is reportedly considering reducing the available monthly amount to $300 instead of $400.

However, Circular 151, which allows depositors to withdraw their trapped dollars at LBP 15,000 per dollar, remains unaffected by the current changes.

The BDL is expected to issue an official circular regarding these updates soon.

Moreover, sources suggest that this measure is temporary until the government announces a comprehensive solution for deposits, starting with implementing the necessary reforms.