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Lebanon sees no significant Syrian cash flow: senior banker

Reports of billions of dollars of capital flight from Syria are exaggerated, with little sign of Syrian money entering Lebanese banks, says industry figure

Reuters, Sunday 10 Jul 2011
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Views: 1290

Lebanon has not received significant inflows of money from neighbouring Syria, a senior Lebanese banker said, despite reports of Syrian capital outflows triggered by the unrest against President Bashar al-Assad.

Makram Sader, Secretary General of the Association of Banks in Lebanon, said reports of many billions of dollars of capital flight from Syria were exaggerated, and there was little sign of Syrian money piling into Lebanese banks.

"Our deposit growth in the last five and a half months was US$3.3 billion -- less than our normal growth," Sader told Reuters. Annual deposit growth had averaged 15 per cent for the last five years, he said.

The Economist magazine cited an estimate last week that $20 billion had left Syria during the unrest, much of it to Lebanon, but Sader said total deposits in the Syrian banking industry were only $28 billion.

"An outflow of $20 billion out of $28 billion -- you would see a quick breakdown of the system," he said.

He said official Syrian figures showed withdrawals of around $1.7 billion from Syrian banks in the first quarter of the year.

Bankers say more recent figures have yet to be published, but they estimate withdrawals have continued at the same pace. An economist in Damascus told Reuters last month that people may simply have been withdrawing money from banks and keeping it "under their beds.".

The chairman of the Union of Arab Banks said in May around 7 to 8 per cent of bank deposits had been withdrawn from banks and converted to dollars, but the money stayed in Syria.

Syrian authorities have tried to stem withdrawals from the banking system since the unrest broke out in March, raising interest rates on deposits by two percentage points and waging high profile campaigns appealing to Syrian patriotism.

In a speech last month Assad said that the possible collapse of the economy was a major threat, and warned that when the crisis ends officials would "ask all those who have money about what role they played, how the contributed to this campaign"

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