Home Business Insights & Advice Lebanon’s Central Bank Governor speaks out over “systematic campaign” against him

Lebanon’s Central Bank Governor speaks out over “systematic campaign” against him

by LLB Reporter
30th Apr 20 12:48 pm

Riad Salameh, Governor of Lebanon’s Central Bank, spoke out today in a one-hour long video conference. He addressed the “systematic campaign” against him, which is widely thought to have been driven by Hezbollah.

Mr Salameh was responding to accusations made by Lebanon’s Hezbollah-backed Prime Minister Hassan Diab last week in which he blamed the governor responsible for Lebanon’s economic situation, even hinting that the governor has intentionally engineered the crash of the pound. Criticism of Mr Salameh has also come directly from the Iran-backed Shi’ite group Hezbollah in recent days, as well as Gebran Bassil, the former foreign minister and part of the Christian Free Patriotic Movement (FPM), also allied with Hezbollah.

Mr Salameh, who has governed the Central Bank since 1993, said his actions had all been directed at maintaining Lebanon’s monetary stability in the face of various crises over the past years. He reminded politicians that although the Central Bank funded the government, it is actually politicians who spent the money. He also spoke of politicians repeatedly reneging on promises of reform.

Mr Salameh used today’s video conference to firmly reject Prime Minister Diab’s accusations that he had been “opaque”, reminding the Prime Minister that he had handed over requested information to the prime minister on April 20. Mr Salameh also confirmed that the Central Bank currently has 20 billion dollars in reserves and reassured citizens that their bank deposits were safe and that the state would not intervene to take a cut of their money to cover its debts.

Mr Salameh also gave an overview of the bank’s practices, explaining that its policies of financial engineering, which critics say resulted in Lebanon drawing dollars to the country at too high a price, has in fact helped to buy time to enact reforms to put the state finances on a sustainable footing. He said: “This engineering, we were forced to do it to buy time for Lebanon, so Lebanon could reform, he said, adding that it was “not the responsibility of the central bank” if the state failed to enact agreed reforms.
Lebanon’s challenges are worsening, reflected by the fact hundreds of protesters in the northern city of Tripoli clashed with troops until late Tuesday night, with injuries on both sides. The coronavirus and the weeks-long virus lockdown only exacerbate the economic difficulties.

Despite the attacks from Hezbollah at home, Mr Salameh is respected by the international community for taking wise decisions during the recent turbulence for the country. There is international concern that over Hezbolla’s influence in Lebanon, not only politically, but now seemingly over finance and economics as well. The worry is that just when Lebanon most needs the professionalism and prudence of Mr Salameh, he will be hounded out by Hezbollah.

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