Over the last few days, Lebanese citizens have been panicking as workers at Banque du Liban (BDL), the country’s central bank, went on an open-ended strike.
Earlier Saturday May 4th, BDL employees announced that the strike, initially planned to last two days, would reboot indefinitely as an escalation as they protested against potential cuts to their wages and benefits.
The strike, which lasted three days and was suspended on May 6th, managed to knock out the country’s stock exchange for a second day on Tuesday May 7th, putting increasing financial-sector strain under the spotlight.
As a result of the strike, banks took precautionary measures such as downsizing the amount of cash withdrawals dispensed at ATMs for each account, bringing withdrawals as low as $1,000 per day.
BDL workers suspended the strike until Friday May 10th and said that the government’s response will determine whether they restart the sit-in. Such a move could trigger a wide range of economic repercussions.
However, prominent economist Jassem Aajaqa sees no direct catastrophe befalling the country’s financial status or currency.
“BDL has a risk management plan which allows it to breeze through any exceptional situation, including strikes,” Aajaqa told 7Dnews, explaining that “it will not allow finances to be jeopardised as it is directly linked to maintaining the lira.”
Article 70 of the national law on central banking stipulates the preservation of the Lebanese pound and the maintenance of both economic stability and the integrity of the banking system.
This has pushed BDL, before the Union of the Syndicates of Bank Employees even announced the suspension of the strike, to reign in operations, fix the national currency’s exchange rates and boost the processing of foreign transactions in the country’s public and private sectors.
Despite Aajaqa’s reassurances on the strike having no effect on the Lebanese pound, a slowdown or halt of operations at BDL, if lasting longer than a month, could take a toll on all Lebanon’s sectors.
Thousands of the small Mediterranean country’s administrative transactions and the processing of an estimated million cheques will suffer daily as a result of a halt of work at BDL.