Rolexes and cars; Lebanese spend big to prise savings from the bank

By Ellen Francis BEIRUT (Reuters) - When she heard Lebanese banks would limit cash withdrawals, Rita, a doctor, rushed out to buy a $10,000 Rolex watch on her credit card, anxious to protect some of her savings. 'It's better than keeping my money in the bank,' she said. Every week, account holders line up for their quota of cash - for some less than $200 - from their banks, which have also blocked foreign money transfers as Lebanon sinks deep into economic crisis.

Reuters January 27, 2020 00:10:24 IST
Rolexes and cars; Lebanese spend big to prise savings from the bank

Rolexes and cars Lebanese spend big to prise savings from the bank

By Ellen Francis

BEIRUT (Reuters) - When she heard Lebanese banks would limit cash withdrawals, Rita, a doctor, rushed out to buy a $10,000 Rolex watch on her credit card, anxious to protect some of her savings. "It's better than keeping my money in the bank," she said.

Every week, account holders line up for their quota of cash - for some less than $200 - from their banks, which have also blocked foreign money transfers as Lebanon sinks deep into economic crisis.

Dollar shortages have pushed up prices, the Lebanese pound has slumped on the parallel market and confidence in the banking system has collapsed.

People with savings in the bank are scrambling to get the money out, buying jewellery, cars and land with credit cards or cashier's checks.

Several people told Reuters they feared even tighter controls, a haircut on their deposits, bank failure or a devaluation of the Lebanese pound, which has been pegged to the U.S. dollar for 22 years.

They asked not to be fully identified due to safety concerns.

The central bank says deposits are safe and pledges to maintain the dollar peg, while the head of the country's banking association said the limits on withdrawals and other measures aimed "to keep the wealth of Lebanon" in the country.

STASHING CASH AT HOME

Many ordinary Lebanese had already started stashing cash at home months before protests erupted in October against the ruling elite that plunged Lebanon into its worst crisis in decades.

In the capital, Beirut, staff at several jewellery stores said customers had poured in recently looking to buy gold and diamonds, sometimes to sell them abroad, though most jewellers are now only accepting cash.

At a Rolex store in the city, sales will only be made if half the payment is in cash in U.S. dollars, an employee said.

When the crisis first began to bite, Lucy, a housewife in her 60s, worried about the money her late husband had left her. She and her daughters pooled all the cash they could get and bought $50,000 worth of gold, hiding it at home.

"It's my father's life savings. I don't want to keep a single penny in the bank," one of the daughters said.

An advisor at a Beirut auction house, who asked to remain anonymous, said she was fielding daily calls from people who want to "put their money into paintings instead of in the bank."

"For the first time, I'm getting calls from people who don't know anything about art," she said.

Abdallah, a doctor in his 50s, bought three cars worth more than $80,000 with a cashier's check.

His bank only allows him to withdraw $100 a week and he fears the controls could be further tightened. "I have no trust in the bank," he said.

(Additional reporting by Dala Osseiran; Editing by Helen Popper)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.