![A demonstrator looks on as Lebanese policemen stand guard outside the Lebanese Central Bank in Beirut. [Getty]](https://english.alaraby.co.uk/sites/default/files/styles/large_16_9/public/2021-06/GettyImages-1074052672.jpg?h=16013371&itok=JswwK9co)
By The New Arab — Frozen deposits in Lebanese banks could have drastic ramifications across the region, as calls mount from foreign governments, businesses, and individuals for the return of withheld funds as Lebanon experiences an unprecedented economic collapse. An official Yemeni banking delegation is currently visiting Lebanon to discuss the suspended funds, which are having a devastating effect on Yemen’s banks, on top of the war which has ravaged the country for nearly six years. The Yemeni delegation met with the Governor of the Central Bank of Lebanon, Riad Salameh, to discuss the return of around $200m, according to Yemeni sources in the banking sector. Throughout the war, Yemen’s banking sector has relied on Lebanon’s banks which have provided access to regional and international finance and enabled Yemen to conduct private banking transactions over imports and other business deals.
Al-Araby Al-Jadeed, The New Arab’s sister publication, spoke to one of the Yemeni delegates who said that the discussions had given some grounds for optimism. “We were promised that withheld balances will be released and special obligations to Yemeni banks will be paid, protecting the deep and longstanding relationship between the Yemeni and Lebanese banking sectors,” they said. Another official from the Central Bank of Yemen stressed that the withheld funds are damaging financial markets For almost two years, Lebanon has been facing the worst economic crisis in its modern history. The value of its national currency has collapsed and tight restrictions have been placed on financial transactions which prohibit bank transfers to foreign accounts. Since 18 October 2019, Lebanese banks have frozen accounts with dollar deposits, and have limited withdrawals from accounts containing Lebanese pounds. Local economists say that banks owe more than $90bn. It is not only Yemen’s banks that are affected. Although exact numbers are unavailable, many Yemeni citizens have Lebanese bank accounts.