BEIRUT (Reuters) – Lebanon’s business banks would not have sufficient liquidity to pay again depositors, the secretary normal of the nation’s banking affiliation mentioned on Wednesday in a letter that laid out the banks’ positions.

The letter was signed by the Affiliation of the Banks of Lebanon (ABL)’s Fadi Khalaf and served because the introduction to the ABL’s month-to-month report. Khalaf mentioned it represented his “opinion and private evaluation”.

The letter mentioned business banks had roughly $86.6 billion deposited at Lebanon’s Central Financial institution as of mid-February, and a internet detrimental place with correspondent banks of $204 million as of Jan. 31, 2023.

“These numbers present definitely that the banks don’t have any liquidity,” Khalaf wrote.

Lebanon has been within the throes of a monetary meltdown that has value the native forex greater than 98% of its worth and pushed greater than 80% of the inhabitants under the poverty line.

The disaster erupted in 2019, following a long time of corrupt authorities, profligate spending and monetary mismanagement, and noticed banks impose restrictions on withdrawals and transfers though a capital controls regulation had not been adopted.

That sparked snowballing anger towards the monetary establishments, however the banks say the insurance policies of the state and the Central Financial institution are in charge.

Lebanon’s caretaker deputy prime minister Saade Chami, the architect behind the nation’s stalled restoration roadmap, informed Reuters final 12 months that banks ought to “go first” in absorbing the losses stemming from the monetary sector.

These losses are estimated at round $72 billion.

Lebanon is working to handle the disaster via talks with the Worldwide Financial Fund to realize entry to $3 billion that might kickstart the financial system.

However the IMF mentioned final 12 months that Lebanon’s progress in implementing required reforms remained “very sluggish”, with the majority but to be carried out.