Lebanon's central bank told commercial banks on Wednesday to cap their interest rates on deposits in foreign currencies at 5% and to cap the rate on
Lebanon’s central bank told commercial banks on Wednesday to cap their interest rates on deposits in foreign currencies at 5% and to cap the rate on Lebanese pound deposits at 8.5%.
The central bank also said it would pay interest due on U.S. dollars deposited with it by Lebanese banks half in U.S. dollars and half in Lebanese pounds as an exceptional measure. It said the same applied to U.S. dollar certificates of deposit issued by the central bank.
In a circular seen by Reuters, it said the cap on interest rates would apply to all new deposits and those renewed from Dec. 4. It said banks should pay interest on foreign currency deposits half in the currency of the account and half in Lebanese pounds.
The measures would be valid for six months, it said.
All deposits made before Dec. 5 would remain subject to the agreement between the bank and the customer, it said.
The central bank circular said the decisions aimed to “preserve the public interest amid the exceptional circumstances that the country is presently going through and to safeguard the interests of depositors by not decreasing their bank deposits”.