Lebanon's central bank has said that letter of credit (L/C) openings have declined by more than 90 per cent as the country struggles with a failing economy, a hard currency shortage, the impacts of the coronavirus pandemic and the devasting 4 August explosion at Beirut port.

Retailers in Lebanon are amongst those finding it increasingly hard to import goods after international correspondent banks imposed stricter requirements to open L/Cs to finance imports.

L/C challenges

Figures released by Banque du Liban show that L/C openings totalled US$293.5 million in the first half of 2020, a decrease of 90.8 per cent from US$3.2 billion in the first half of 2019.

International correspondent banks meanwhile have made it even harder for importers to open L/Cs following the downgrade of Lebanon's sovereign ratings.

This has added to the woes of importers already struggling to meet stricter import L/C opening requirements imposed by the central bank.

Enterprising solutions

One Chinese supplier however has come up with an enterprising solution to the problem of Lebanese importers no longer being able obtain foreign currency or bank financing to import Chinese merchandise.

The Chinese shoe manufacturing company has established an office in Beirut to conclude deals directly with Lebanese retailers.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.