If you’re relieved that the most recent proposed haircut on bank depositors was dismissed, don’t be. The reality is that there’s already an “indirect” haircut happening on your accounts and BDL just issued yet another circular that forces banks to pay all depositors, except the small ones, in Lebanese Liras at the rate set by the bank.

In other words, if you have an account with a $20K balance and wish to withdraw 300$, you will be given this amount at LL2600 (latest bank rate) and if you still need dollars, you will go to the nearest exchange office and get your dollars back at LL3100 or LL3200 (latest market rate). In other words, the 300$ you withdrew and amounted to LL780,000 are effectively $240 only (20% less).

Add to that, the demand for US dollars will increase for sure, which means that the market rate will skyrocket in the coming weeks, and with that, the 20% loss will turn into 30%, 40% or more who knows?

The circular doesn’t specify any limits, but those will probably remain the same ones set by banks before, same for the bank rate which should be provided daily.