"These numbers show without a doubt that the banks have no liquidity," Khalaf wrote. Lebanon has been in the throes of a financial meltdown that has cost the local currency more than 98% of its value and pushed more than 80% of the population below the poverty line. The crisis erupted in 2019, following decades of corrupt government, profligate spending and financial mismanagement, and saw banks impose restrictions on withdrawals and transfers although a capital controls law had not been adopted. That sparked snowballing anger against the financial institutions, but the banks say the policies of the state and the Central Bank are to blame. Lebanon's caretaker deputy prime minister Saade Chami, the architect behind the country's stalled recovery roadmap, told Reuters last year that banks should "go first" in absorbing the losses stemming from the financial sector.
Those losses are estimated at around $72 billion.
Lebanon is working to address the crisis through talks with the International Monetary Fund to gain access to $3 billion that could kickstart the economy.
But the IMF said last year that Lebanon's progress in
implementing required reforms remained "very slow", with the
bulk yet to be carried out.
(Reporting by Maya Gebeily
Editing by Peter Graff, William Maclean)
