In 2019, right after Lebanon’s October Revolution, my wife and I took off on our one-way trip to southeast Asia.
After one month, we finally reached our third country, Cambodia. We ran out of cash, so we went to an ATM to withdraw money. We tried every single card we had, but to no avail—they were all rejected.
I asked my cousin in Lebanon if there was any problem, and she told us that the banks had set limits on cash withdrawals, which meant that we couldn’t properly use our credit cards outside of Lebanon.
We were baffled—how come I couldn’t use my own money? We tried to contact our bank, but no one gave us any viable response. Due to the sensitive financial situation in Lebanon, we decided to pause our plans and go back to our country.
But since we were out of cash in Cambodia and we couldn’t use our credit cards, my cousin had to send us cash through Western Union. We went back home, and that was only the beginning of an ongoing economic crisis that has exploded last year, threatening our future for the many years to come.
You see, most of the banks in Lebanon are owned by Lebanese politicians. Our government needed money because it was broke, so the central bank asked the private banks for loans and gave them a really high interest rate.
For years, the central bank was just paying interest rates to private banks (that are owned by politicians), so the central bank kept taking loans to keep funding the government, and the government kept stealing with no intention to pay back its debts.
One day, we woke up to find that all the money that had been deposited in the banks was gone—and not just the Lebanese people, but also foreigners.
Sadly, the central bank raised the interest rate in order to attract depositors from around the world. That was how they kept the scheme going over and over until there was no more money left.
Now, every depositor is suffering from indirect capital control. What I mean by capital control is that the official rate was at 1,500 Lebanese Lira per one dollar while the black market rate ranged between 8,000 to 9,000 Lebanese Lira per one dollar.
Consequently, if we had a bank account in USD (most Lebanese did), we couldn’t take our money in dollars anymore—we could only take them in Lebanese Lira at a rate of 3,950 per one dollar with a limit of 1,000 dollars per month, which equaled 400 and 500 dollars at the black market rate.
But if we had an account in Lebanese Lira, we could only take 10,000,000 Lebanese Lira per month, which was the average of 1,000 dollars.
Now, every few weeks, these numbers oscillate. Even if we have savings, we can only withdraw up to 1,000 dollars maximum per month, which is not enough for surviving with the huge inflation that Lebanon has been witnessing.
But the Lebanese people have found many new ways and different tricks to get their cash out of the banks, but with another loss. We did this either to buy basic needs or to stash them in safes.
We had simply lost faith in the banking system. Now, depending on the bank, the limit they have set ranges between 10 to 15 dollars a month. In a nutshell, we can’t buy anything with our credit cards anymore—forget about online shopping.
The only thing we can do now is to take our money at a lower rate and buy dollars from the black market at a higher one (and lose up to 70 percent of its actual value). The black market now is being controlled by money exchangers who, in return, serve the government.
Basically, what the money exchangers are doing is lowering and increasing the black market rate depending on the money that the Lebanese receive from their families abroad. We’ve noticed that, usually, at every beginning of the month (when salaries are paid), they lower the black market rate.
For example, when the 4th of August blast happened at the port of Beirut and destroyed half of our capital, the black market rate was decreased by 100 Lebanese Lira, then it was increased the second day up to 200 Lebanese Lira—knowing that such a destructive explosion should have increased the Lebanese Lira rate.
Sadly, due to this economic crisis, a lot of Lebanese people have been emigrating, and the government, to this day, has no plan to put an end to this problem. In fact, they want us to leave so we can keep sending fresh dollars to our families in Lebanon so they can benefit from them.
What we should do (and what we are trying to do) is to not give money to the banks as much as possible. We’re not even exchanging dollars/Lebanese Lira at the money exchange offices—we’re only exchanging with people who really want to buy dollars for their business or travel purposes.
We created apps and WhatsApp groups that allow us to meet people who need dollars or Lebanese Lira, keeping the corrupt system out. We’re not sure for how long we can keep playing their game, but we’re doing our best not to help them steal money.
As a Lebanese citizen, I don’t feel safe not knowing the destiny of my financial situation. I feel like someone is controlling my daily budget and making decisions on my behalf. Now, my day-to-day life depends on how much a machine is willing to withdraw for me.
We still don’t know where we’re going. But I’ll keep you posted, folks.