Deadly Bank Protests Ratchet Up Pressure on Lebanon Premier
Deadly Currency Protests Ratchet Up Pressure on Lebanon Premier
(Bloomberg) --
Clashes between protesters and troops left one man dead in the northern Lebanese city of Tripoli, as mounting anger over the country’s currency crisis risked reigniting a broad anti-government movement that had subsided with the coronavirus outbreak.
Demonstrators late on Monday set fire to three bank branches, attacked several ATM machines and hurled rocks and fireworks at security forces and homes, the army said in a statement. Former Justice Minister Ashraf Rifi, who’s from the city, said one man had died of his injuries. Banks in Tripoli will shut until further notice, the Association of Banks said.
Forty soldiers were wounded in the violence, which the army blamed on “infiltrators.” Another 13 were hurt when the army tried to reopen blocked roads in other parts of the country, according to the military.
Fearing their savings will be wiped out by a fast-depreciating local currency and hit by spiraling inflation, hundreds of Lebanese are ignoring the restrictions imposed to contain Covid-19 and resuming protests -- burning debris in the street and blocking roads with their cars. Protests against an establishment accused of incompetence and elitism first erupted in October, and soon felled the administration of then-Premier Saad Hariri.
Starved of hard currency as remittances from overseas dried up, Lebanese banks have stopped dispensing dollars to clients entirely after months of setting withdrawal limits. In its latest steps, the central bank instructed lenders to allow withdrawals from foreign-currency accounts in Lebanese pounds only but at a “market rate” determined by banks themselves.
That’s sparked concerns the economic crisis is collapsing Lebanon’s currency peg, an anchor of financial and social stability for more than two decades, and attempts to stabilize the exchange rate have added to the chaos.
Dollar shortages culminated in the government’s decision to default on its debt for the first time, and appeal to the International Monetary Fund for assistance with a recovery program. Officials have turned on each other, with Prime Minister Hassan Diab last week criticizing the country’s long-serving central bank governor for his handling of the crisis.
‘Playing With Fire’
Diab, who formed a government in January, told a cabinet meeting the violence showed a “malicious intention behind the scenes to hurt stability and that’s playing with fire, which will in turn burn those who incite it,” according to his office.
Ministers approved measures to investigate tax evasion and audit government contracts. They also discussed a draft economic rescue plan that the government hopes will help Lebanon get much-needed financing.
The government, which portrays itself as composed of independent technocrats, has struggled to implement promised reforms amid political wrangling. Ministers have failed to name vice governors at the central bank and make judicial appointments.
Last month, Lebanon defaulted on $30 billion of Eurobonds, saying it need to preserve reserves critical to support the import of fuel and wheat.
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