People are ‘robbing’ banks in Lebanon – to take their own money

by | Sep 15, 2022 | World

EXPLAINERLebanon is suffering from a worsening economic crisis since 2019, plunging three-quarters of its population below poverty.Bank heists in Lebanon have become a growing trend – but these armed “robbers” storming into banks are not stealing anyone else’s money. They are just demanding access to their own savings.
And instead of being prosecuted, the perpetrators have largely been allowed to remain free and have become folk heroes.
The incidents have become increasingly common as Lebanon’s economic crisis continues. The local currency, the Lebanese pound, has depreciated by more than 90 percent against the United States dollar on the black market, while the government’s restrictions on how much money people can withdraw from their own bank accounts have also exacerbated the situation.
So what is behind these bank heists?

Lebanon has been reeling from a worsening economic meltdown since 2019, plunging 80 percent of its population – about three million people – below the poverty line, according to the United Nations.
Poverty and unemployment have soared, and savings-account values have evaporated, along with the country’s middle class.
Since 2019, Lebanese banks gradually imposed draconian controls on deposits, effectively locking millions of customers out of their foreign currency savings.
“Every time you want to withdraw money, it would be at a rate much lower than the market value,” said Al Jazeera’s Zeina Khodr. “For example, if you want to withdraw $700, they gave you $200. So that’s a de facto haircut.”
A haircut in economic terms means a reduction applied to the value of an asset. In this case, it refers to the banks’ absurdly unfavourable exchange …

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