During its meeting on Thursday, June 27, 2023, the Central Bank of Lebanon resolved to extend Circulars 151 and 158. While Circular 151 sustained its original form, upholding the exchange rate for deposit withdrawals at 15,000 Lebanese pounds per dollar, Circular 158 underwent modifications. The latter, initially permitting beneficiaries to withdraw both $400 and an equivalent amount in Lebanese pounds at the aforementioned exchange rate, was reconfigured to exclusively allow cash withdrawals of $400, rendering Lebanese pound withdrawals unavailable. Notably, the market exchange rate for June and July was relatively stable, hovering at around 92,000 Lebanese pounds per USD.

LIMS offered insights into the alteration to Circular 158, identifying it as a manifestation of capital controls. According to the revised provisions, individuals possessing US dollar deposits in Lebanese banks are eligible to withdraw a maximum of $400 monthly, translating to an annual ceiling of $4,800. This cap remains applicable until the cumulative withdrawals reach approximately $50,000, a milestone that would span a decade. Subsequent to this threshold, withdrawals will no longer be sanctioned. Circular 151 equates to imposing an 84% fee, which represents the difference between the market 92,000 LBP rate and the mandated 15,000 LBP rate, for amounts exceeding $400 monthly. The underlying intent behind the circulars is to temper the speed of withdrawals using a robust capital control regime.

LIMS underscored that the revision to Circular 158 shows a shift in the central bank’s priorities. Formerly, the focal point rested on grappling with the banking crisis and reducing bank losses by compelling partial Lebanese pound withdrawals. However, the present emphasis is solely on the implementation of capital controls. Consequently, the onus of resolving the banking crisis has been transferred to the government and the parliament.

• Stopping The “Haircut” On The Withdrawals Of The “158”: Controls The Exchange Rate And Aims Towards Reforms, July 3, 2023: This Is Lebanon, Article AR
• Effect Of Amending Circular 158 On The Exchange Rate!          July 5, 2023: Leb Economy, Article AR
• A Resounding Surprise For Depositors… Banks Began To Return Their Money In Full And In Hard Currency! July 9, 2023: Al Jadeed, TV Interview AR
• Details Of The Amendments To The Circulars Of The Banque Du Liban, And When Does The Application Start? July 9, 2023: OTV, TV Interview AR
• What is the best way to transfer money to Lebanon? July 21, 2023: Leb Economy, Article AR