On December 4th, Lebanon’s central bank issued circular instructing banks to lower interest rates on U.S. dollar and Lebanese pound deposits amid the critical financial situation. In details, BDL asked the Lebanese commercial banks to reduce interest rates on deposits to a maximum of 5% and 8.5% on foreign and LBP deposits, respectively. Moreover, half of the interest on foreign deposits will be paid in foreign currency while the other half will be paid in Lebanese pounds. As such, interest on banks’ USD deposits placed at BDL will be paid 50%in dollars and 50% in LBP.
The measures will remain in place for six months and will be applied to new and renewed deposits as of Dec. 4.