If no reforms are immediately undertaken…

If no reforms are immediately undertaken…

March 13, 2023

Boukather: If no reforms are immediately undertaken, correspondent banks might review their relationships with Lebanese banks

In an interview with Nida Al Watan newspaper 🇱🇧 President of RDCL Nicolas Boukather asserts that “Currently positive cashflows that are being generated are either being kept inside Lebanon, for those who don’t have overseas accounts. And that is whether through fiduciary deposits, or deposits in fresh accounts, or through Cash kept in vaults”.

Regarding institutions who have access to overseas bank accounts, they are keeping “a part of the postive cash flow available abroad, knowing that it has become extremely difficult to open a bank account in foreign banks, and that there is a gradual pressure aiming to decrease Lebanese residents presence in international banks”.

In addition, he considered the restructuring of the banking sector as a matter of urgency, and taking the prerequisite reforms becomes urgent and overdue to finalise a deal with the IMF, hence restoring confidence. He noted that without these reforms, Lebanon might be downgraded by international agencies and hence this will constitute a major risk that may lead the correspondent banks to review their services and relationship with Lebanese banks. If this unfortunate event happens, transferring fresh dollars out of Lebanon, even for necessities, will be extremely costly, if not impossible.

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