Central bank strike cripples Lebanon stock exchange

Marco Green
May 9, 2019

The Beirut Stock Exchange suspended trading on Monday due to an open-ended strike declared by the employees of Lebanon's central bank, adding to the country's economic crisis as the government discusses an austerity budget to avoid an economic crash.

According to sources quoted by the daily, President Michel Aoun has "encouraged the ongoing efforts in this direction to ensure the resumption of normal movement in the exchange market, the clearing room, where transactions are settled between banks, to prevent a reduction in the circulation volume of Lebanese and foreign currencies in the market", they said.

Employees of Lebanon's Central Bank went on strike on Monday over state budget proposals that would cut their benefits.

Syndicate head Abbas Awada, in an interview with the broadcaster al-Jadeed, said a decision on next steps would be taken at their general assembly meeting on Tuesday, but said they may take "a positive decision" to relieve the situation.

Local economists believe that the indefinite strike announced by the central bank's employees in Lebanon last Saturday will have a big impact on people and commercial banks.

The draft budget has proposed annulling performance-linked bonuses paid in some state-run institutions, including the Central Bank.

"In order to guard the interest of investors, the Beirut Stock Exchange admits the suspension of investing in its markets till further notice", it stated.

No shares changed hands on the exchange on Monday, it said on its website.

Employees of the Lebanese central bank gather during a strike over state budget proposals that would cut their benefits, in front of the central bank in Beirut, Lebanon May 6, 2019.

Public sector employees have been waging demonstrations in the past few days to protest a possible cut in their wages aimed at reducing the state budget's deficit.

To curb Lebanon's budget deficit, which has increased to over 11 percent of GDP, the cabinet will seek to reduce the deficit by 1 percent each year over the next five years by limiting government expenditures.

Khalil also said the government insisted on raising the tax rate on interest payments to 10 per cent from 7 per cent, saying this was a fundamental part of the draft budget.

Other reports by Click Lancashire

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