Lebanon’s banks see no ‘extraordinary movement’ of money on reopening

Lebanon’s banks did not see “any extraordinary movement” of money on Friday or Saturday, the first two days they reopened to the public after a two-week closure due to nationwide protests, the head of the banking association said on Saturday.

“The reaction was almost the way we expected and anticipated. However, people were asking a lot of questions and we provided as much assurances as possible,” Salim Sfeir, head of the Association of Banks in Lebanon, told Reuters by email.

Analysts and bankers had cited widespread concern about a rush by depositors to withdraw their savings or transfer them abroad when the banks reopen.

The nationwide protests that erupted on Oct. 17 tipped Lebanon into political turmoil as it grapples with the worst economic crisis since the 1975-90 civil war. The uprisings led Saad al-Hariri to quit as prime minister this week.

“We are trying to counter rumors and avoid panic in order to prevent any unnecessary and unjustified withdrawals,” Sfeir said.

When banks opened their doors on Friday, no formal capital controls were imposed, but customers encountered new curbs on transfers abroad and withdrawals from US dollar accounts, bankers and customers said.

A banking source said branch operations so far had been “better than expected.”

Amid rain, protest activity was low on Saturday morning, but there were calls on social media for gatherings later in the day.

The central bank was not immediately available for comment on how much money had left and entered the country as banks reopened.