Indefinite workers of Lebanon’s Central Bank, the Banque du Liban go on strike, halting the trading at the Beirut’s Stock Exchange.
The employees are taking industrial action over talk of possible salary reductions as well as a rumored change in the central bank’s relationship with the finance ministry. They returned to work on Tuesday, after the suspended weekend, but the suspension is likely to be resumed on Friday.
Because of the strike, the transactions won’t possibly be settled on time and the decision to shut down the Stock Exchange is made to protect the interest of the investors. According to the Jad Chaban, an associate professor at the American University of Beirut, the trading volume at the exchange is insufficient to have any fiscal impact. There are only 10 listed companies and the last listing was done back in 1998.
Still, the suspension will cause turbulence for the economy, as the clearing/interbank transfers were affected, and foreign exchange transaction was also put on hold until the bank reopened.
The trade is suspended against the government’s discussion of the austerity package. Prime Minister Saad Hariri wants to access the $11bn loan package pledged to Lebanon at the 2018 CEDRE development and reform conference. In order to get that money, Lebanon must satisfy economic and fiscal conditions set by international donors.