BEIRUT (Reuters) - Since Lebanon was placed in lockdown to curb the spread of coronavirus, cash-strapped banks have cut access to dollars for depositors already separated from much of their savings by months of tightening controls.

The health ministry has recorded 163 infections from coronavirus so far and experts warn Lebanon's healthcare system may be ill-prepared, as dollar shortages have for months drained it of critical supplies.  The outbreak has compounded Lebanon's woes, coming after it declared that it could not pay hefty debt obligations and needs foreign currency reserves for key imports.  The financial crisis, which has hiked prices and weakened the local currency, pushed banks to cap cash withdrawals, some to as low as $100 per week.

Lebanon's cabinet exempted banks from closing when declaring the lockdown, saying they could maintain daily operations "at a minimum level", without specifying the ground rules.  Banks then said they would close until March 29 to protect employees from the virus outbreak but would keep a small number of branches open while handling operations for essential imports and providing salaries in Lebanese pounds.  "I need to withdraw dollars to pay salaries...There are no dollars in the ATMs now," said Viviane Khoueiry, a senior partner at a law firm. "The workers need the money more and they rely on cash."

Some customers said their banks told them to withdraw cash from ATMs in Lebanese pounds at a pegged rate roughly 40% weaker than on the parallel market, effectively slashing their dollar savings.  Others said they were turned away from open branches and told those were intended to serve only corporate clients.  The banking association has said the curbs aim to keep Lebanon's wealth in the country. With patience running thin, the government has promised a draft law to standardise the capital controls, which it is expected to finalise next week.

Some Lebanese took to Twitter to complain that the policies amounted to a haircut, or one-time reduction, on their savings and were meant to block access to cash dwindling reserves.  "In Lebanon, bankers took corona as an amid excuse to close their doors to control the ongoing crisis and lack of liquidity," said one frustrated tweet.