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bankingOctober 11, 2020

Cashing dollar withdrawals in lira extended to the end of March 2021

The Central Bank (BDL) has extended until the end of March 2021 the decision requiring banks to pay withdrawals from foreign currency accounts in lira at the exchange rate of BDL’s foreign exchange platform.

BDL said in a circular that the ruling does not apply to ‘fresh money’ transferred from abroad which will continue to be paid in foreign currencies.

The decision to pay foreign currency withdrawals in lira was taken on April 21, 2020 and was effective for six months.

Earlier in April, the Central Bank decided to set up a foreign exchange platform to determine the prices of foreign currencies especially the US dollar. Besides BDL, banks and money changers joined the platform which was named ‘Sayrafa’. Dollars were withdrawn from deposits at the rate of LL3,900.

Foreign currency deposits dropped by $5.5 billion during the first half of 2020 while lira deposits decreased by $8.9 billion due to intensive cash withdrawals. Depositors were concerned about a possible haircut or the collapse of the banking system or a further deterioration of the exchange value of the lira.