Lebanon’s central bank seeks extra powers

A Lebanese protester carries a child as he takes part in a rally in front of a bank in the southern city of Sidon on December 30, 2019 to protest against nationwide imposed restrictions on dollar withdrawals and transfers abroad. (AFP)
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Updated 12 January 2020

Lebanon’s central bank seeks extra powers

  • Measures imposed by Lebanese commercial banks needed to be regulated and unified, a central bank letter said

BEIRUT: Lebanon’s central bank is seeking extra powers to regulate and standardise controls which commercial banks are imposing on depositors, the governor said on Sunday, saying his intention was to ensure “fair relationships” between banks and customers.

Seeking to prevent capital flight, commercial banks have been tightly controlling access to deposits and blocking most transfers abroad since October, when anti-government protests brought a long-brewing Lebanese economic crisis to a head.

The Lebanese authorities have not, however, introduced formal capital controls regulating these measures.

Central bank governor Riad Salameh, in a text message to Reuters, confirmed sending a letter to Lebanon’s finance minister on Jan. 9 seeking “exceptional powers necessary to issue regulations pertaining” to conditions in the sector.

He said no new measures were planned.

The letter, reported by Lebanese media late on Saturday, said the measures imposed by commercial banks needed to be regulated and unified “with the aim of implementing them fairly and equally on all depositors and clients.”

Lebanon’s caretaker government has not issued any statement on Salameh’s request, which was set out in a letter to caretaker Finance Minister Ali Hassan Khalil.

In the letter, Salameh said implementation of the controls by commercial banks had “on several occasions led to prejudicing the rights of some clients, particularly with respect to the unequal approach with other clients.”

He urged Khalil to work with the government “to take appropriate legal measures ... to entrust (the central bank)” with the necessary extra powers.

In justifying this, he cited the need to “secure the public good, to protect banking and monetary stability ... and to protect the legitimate interests of depositors and clients.”

Reflecting a hard currency shortage, commercial banks have gradually reduced the amount of dollars customers can withdraw since October. For most, the cap is now a few hundred dollars a week.

Lebanon is facing the worst economic crisis since its 1975-90 civil war, rooted in decades of state corruption and bad governance that have landed the country with one of the world’s heaviest public debt burdens.


Huawei: Smartphone chips running out under US sanctions

Updated 10 min 12 sec ago

Huawei: Smartphone chips running out under US sanctions

  • Huawei is at the center of US-Chinese tension over technology and security
  • Washington cut off Huawei’s access to US components and technology last year

BEIJING: Chinese tech giant Huawei is running out of processor chips to make smartphones due to US sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure.
Huawei Technologies, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. The feud has spread to include the popular Chinese-owned video app TikTok and China-based messaging service WeChat.
Washington cut off Huawei’s access to US components and technology including Google’s music and other smartphone services last year. Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.
Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.
“This is a very big loss for us,” Yu said Friday at an industry conference, China Info 100, according to a video recording of his comments posted on multiple websites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.
Yu said this year’s smartphone sales probably will be lower than 2019’s level of 240 million handsets but gave no details. The company didn’t immediately respond to questions Saturday.
Huawei, founded in 1987 by a former military engineer, denies accusations it might facilitate Chinese spying. Chinese officials accuse Washington of using national security as an excuse to stop a competitor to US tech industries.
Huawei is a leader among emerging Chinese competitors in telecoms, electric cars, renewable energy and other fields in which the ruling Communist Party hopes China can become a global leader.
Huawei has 180,000 employees and one of the world’s biggest research and development budgets at more than $15 billion a year. But, like most global tech brands, it relies on contractors to manufacture its products.
Earlier, Huawei announced its global sales rose 13.1 percent over a year ago to $65 billion in the first half of 2020. Yu said that was due to strong sales of high-end products but gave no details.
Huawei became the world’s top-selling smartphone brand in the three months ending in June, passing rival Samsung for the first time due to strong demand in China, according to Canalys. Sales abroad fell 27 percent from a year earlier.
Washington also is lobbying European and other allies to exclude Huawei from planned next-generation networks as a security risk.
In other US-Chinese clashes, TikTok’s owner, ByteDance, is under White House pressure to sell the video app. That is due to fears its access to personal information about millions of American users might be a security risk.
On Thursday, President Donald Trump announced a ban on unspecified transactions with TikTok and the Chinese owner of WeChat, a popular messaging service.