With the indefinite strike going on at the central bank of Lebanon, the Beirut stock exchange remained shut on Monday.
On 6 May 2019, a statement posted on its website stated that the Exchange operations were suspended due to the open strike. To protect investors, the exchange will not function, said the statement.
Workers of Banque Du Liban went on an open strike on Monday. To save up on state funds, the salary and service benefits would be cut, said a report. This report triggered the employees to go on strike.
The stock exchange has only about ten listed companies, says the head of the research and analysis department Naseeb Ghobril from Byblos Bank.
Lebanon has a very fragile economy and the growing discontent in the country is further escalating the fragility. The clash between the country’s two political parties is fuelling the discord.
With the strike, the entire economy almost came to a standstill, says a senior banker. Interbank transfers have been affected, cheque clearances are blocked and foreign exchange transactions could not function until banks reopen, says Ghobril.
The Beirut Stock Exchange has a relatively low volume of trade, but trading was suspended as the clearing operations handled by the central bank were not functioning. The company which handles the clearing operations of the BSE, Midclear, has said that it could not settle or clear trade as it is owned by the central bank.
Public debt in the country is reaching unsustainable levels. Lebanon has become the third-worst performing country, says Bloomberg data.
The private banking sector has been showing record high profits in spite of the economic turmoil in the country and can lend to the government, says Chaaban, an associate professor from American University of Beirut. The banks have more than 7 percent increase in Net Profits annually despite the falling GDP and a decline in major sectors, he says.
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