BEIRUT: Supermarket owners in Lebanon blamed “tough measures” by the Banque du Liban for introducing a new payment system for their customers.
The change in the central bank requires payment of 50% of the value of purchases in cash and 50% by bank cards, due to the “low liquidity” of the markets, according to Nabil Fahed, head of the Union of Supermarket Owners.
This development came on the same day that petrol station owners decided to no longer accept full payment for fuel by credit card.
Economist Dr Jassem Ajaka described the repercussions as “economically catastrophic, as long as the amount of Lebanese pound banknotes a citizen can withdraw from banks is limited as prices rise”.
This, he claimed, would cause people to consume less, leading to lower GDP and a greater contraction of the economy.
Charles Arbid, president of the Economic and Social Council, said that Lebanon “is experiencing an inflationary depression: that is, consumption and economic movement are at a standstill”.
Operational prices are also rising for sectors such as energy and transport, developments which he said require the immediate launch of a three-dimensional participatory dialogue at government level with employers and workers to find solutions. and act.
He added: “No solution is magic and readily available.”
The Association of Banks in Lebanon, meanwhile, will pay government-approved social assistance to public sector employees, including the military.
This aid is equivalent to half an additional salary per month, with a minimum of 1.5 million Lebanese pounds (993 dollars) and a maximum of 3 million pounds. Sixty percent of this is paid in cash, and other means of payment are being adopted to transfer the remaining 40% by credit card or check.
Nawal Nassr, President of the Public Administration Staff Association, said, “We can no longer afford to be approached with this level of absurdity.
“So far, we have committed to one day attendance and will stop doing so if this procedure is applied.”
The repercussions of the Russian invasion of Ukraine, which exacerbated the world oil crisis and its derivatives, have also reached Lebanon.
A gallon of petrol in the Mediterranean country currently costs £500,000 and now has to be paid for in cash.
Abdo Saadé, leader of a group of private generator owners, warned on Saturday that monthly subscription fees would rise by 30-40% due to the high price of diesel for his generators.
Prices currently range between 800,000 and 2 million pounds, and possibly even more depending on consumption, he said,
“After March 15, we may shut down generators in most areas due to people’s inability to pay utility charges and (the) lack of cash,” Saade added.
The severe economic crisis Lebanon has been facing for two years has hampered overseas bank transfers, with several banks introducing new rules to handle deposits.
Withdrawal limits in pounds and Lebanese dollars are no longer proportional to the amount of money citizens need to pay their expenses.
Traders say they used this procedure because they pay importers cash for their goods.
Ajaka explained, “Why do they want to pay cash? The first reason is that the vendors only accept cash, which means the problem is with the vendor, whose reasons need to be investigated. The second reason is that traders work with illegal people. The third reason is to keep cash as a safety margin in case the situation deteriorates.
He pointed out that the merchants “argue that the banks ask them to put their daily income in (the) banks so that they transfer cash to their employees when paying their salaries”.
Ajaka added that reliance on cash increases tax evasion, as traders then declare less of their activities and deprive the banking sector of resources to reinject into the economy.
A Beirut bank manager, who declined to be named, told Arab News that the BdL “works by activating a banking text to dry up the Lebanese lira (pound) market, in addition to taking other measures aimed at curbing the black market that manipulates the dollar exchange rate.
“At the same time, he decided not to respond to banks’ requests for liquidity in the Lebanese pound, asking them to obtain it on the market.”
The bank manager added: “The central bank believes that the lira liquidity that flowed out of it in huge quantities did not return to the central bank through circulation. So where did this money go? It either went to storage or to supply the black market.
The source said that although Greece passed this measure during its economic crisis, it cannot be passed for a long time.
Ajaka believes that the authorities are likely to “promulgate laws and decrees to force merchants to accept payment by bank cards because it is not possible to continue with cash in this way”.