World News | Lebanese banks suspend indefinite strike at Prime Minister’s request

BEIRUT, Feb. 24 (AP) Lebanon’s struggling banks decided Friday to suspend strikes that began earlier this month for a week after caretaker Prime Minister Najib Mikati asked them to do so.

The Lebanese Banks Association did not provide further details on the suspension. The strike began on Feb. 7 to protest a recent court ruling that forced one of the country’s largest banks to pay two of its depositors cash savings.

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The decision comes as many Lebanese, including civil servants, want to get their monthly salaries. Salaries are usually paid through bank accounts at the end of the month.

Lebanon’s banks have been hit hard by the country’s historic economic collapse that began in October 2019 and have since imposed informal capital controls under which depositors can only withdraw small amounts of their savings at an exchange rate far below that used in the Lebanon market. .

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The economic crisis – rooted in decades of corruption and mismanagement by the country’s political class – has impoverished more than three-quarters of Lebanon’s 6 million people. The Lebanese pound has lost 97% of its value against the dollar.

Informal capital controls have prompted some overseas depositors to be locked out of their deposits, launching lawsuits abroad and with Lebnanon, putting pressure on banks to release their deposits in full.

In Lebanon, some depositors have chosen armed forces to break into banks and force cashiers to hand over their money. Several such armed actions last year prompted a strike at the bank in September 2022 and a week-long shutdown over security concerns.

Earlier this month, Lebanon’s Supreme Court overturned a 2022 judgment in Fransabank’s favor, with two depositors suing the bank for cash payments.

The ruling overturns a previous ruling that allowed banks to pay them by check.

This would not allow them to get their money back in full, as they would have to deposit the check into a bank account, where the money would get stuck again.

Angry Lebanese smashed windows and set tires on fire outside two of the country’s capital, Beirut, in mid-February as the value of the Lebanese pound hit a new low.

Despite the economic collapse, Lebanese authorities have yet to implement reforms demanded by the international community to free up billions of dollars in loans and grants.

The IMF has criticized Lebanon for being slow on reforms since the government and the IMF began negotiations in May 2020.

Meanwhile, banks have refused to hold shareholders accountable for the crisis – as envisioned in the proposed economic recovery plan – and insisted that the government and bank depositors should bear the greatest burden of losses. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)