The Governor of the Banque du Liban, Riad Salameh, confirmed to Reuters today, Friday, that the central bank can still contain the financial collapse in the country through "monetary initiatives," even after his term ends at the end of this month. Salameh (73 years old) reiterated his promise to step down when his term ends on Monday. Recently, his 30-year tenure has been marred by severe economic collapse and accusations, both in Lebanon and abroad, of embezzling large amounts of public funds.
Salameh stated that he acted according to the law and that his lawyers filed legal objections in France and Germany, where he faced accusations. He added, "As I leave, and despite the crisis that is expected to lead to a complete collapse, the central bank can contain this crisis through monetary initiatives." He noted that the Lebanese economy achieved growth of 2% last year and may see growth of around 4% this year, but did not provide further details on specific criteria.
The collapse has drained 98% of the value of the Lebanese pound, the GDP has contracted by 40%, and inflation has soared to over 250%, according to the International Monetary Fund. The political elite in Lebanon has been unable to announce a successor to Salameh, risking further dysfunction in a state already troubled by years of political paralysis and financial turmoil.
Under Lebanese law, first deputy governor Wassim Mansouri will assume the duties of the Governor of the Banque du Liban in the absence of a successor. Mansouri and three other deputy governors have proposed a set of measures that include urgent legislation to reform the banking sector, implement capital controls, and dismantle the long-standing peg of the Lebanese pound to the US dollar. However, the political elite has resisted reform measures in recent years, casting doubt on the steps proposed for the future by the deputy governors of the central bank.
