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Central Bank Governor Riad Salameh said on Wednesday that his term will end on July 31st, 2023, and that “he is ready to close this chapter of his life.” “I will refuse any extension to my mandate, even if it is for technical reasons,” he severely stated.
During a live interview on local TV station LBCI, Salameh said that for 27 out of the 30 years of his mandate, the Central Bank actively contributed, through its monetary policy, to the country’s stability and economic growth. “Lebanon achieved growth during my tenure, as the gross domestic product rose to more than $55 billion, and the banking sector witnessed an increase in deposits to more than $170 million,” he explained. “We succeeded in mitigating the impact of the economic crisis, and we were able to re-establish an economic growth that exceeded 2% during 2022, despite all expectations,” he noted.
He then revealed that “there is a positive balance in the mandatory reserves, amounting to 14 billion and 305 million dollars, excluding gold.”
Commenting on the four vice-governors’ positions and the possible vacuum at the head of the BDL, Salameh insisted that he and his deputies formed a cohesive team for three years despite their numerous differences. “Today, we are at a crossroads, as there is no appointment of a new governor. The vice-governors, especially the first vice-governor, should take charge of the institution,” he confirmed.
Riad Salameh also emphasized that the Central Council is composed of the four vice-governors, the general director of the Ministry of Economy, and the governor, to explain that each member has a vote, but no one can exercise dictatorship. “I do not violate the law and the decisions that come out of the Central Council, such as circulars, are implemented by the governor, who is also responsible for implementing the Monetary and Credit Law. The intervention in the foreign exchange market to buy and sell US dollars took place in agreement with the Minister of Finance and not by a decision issued by the Central Council after we witnessed a significant rise in the exchange rate when the dollar exceeded 150,000 Lebanese pounds,” he stressed.
Responding to the accusation made by the leader of the Free Patriotic Movement (FPM), MP Gebran Bassil, Salameh said that the Central Bank had to deal with the consequences of the government’s policies that led to deficits in electricity, with the Ministry of Energy receiving 25 billion dollars from the Central Bank for the electricity dossier over ten years. He also mentioned other financial burdens placed on the Central Bank by the government. “The first reform that has to be implemented should be to stop the State from borrowing from the Banque du Liban (BDL), as there has been reliance on the Central Bank throughout the years to run the public sector. During negotiations with the IMF, I called for the abolition of Article 191 of the Monetary and Credit Law that allows the State to borrow from the BDL,” declared Salameh. “I also strongly advised against the public sector pay grid because I knew the consequences would be dangerous, and I urged the State to pay it over 5 years. In addition, the default in the payment of Eurobonds during former PM Hassan Diab’s term and the involvement of the FPM in this matter contributed to the decline of the currency’s value,” he said.
Salameh then touched on the subject of the Sayrafa platform and confirmed that its objective was for the Central Bank to have a role in the market and create transparency. “The Central Bank of Lebanon succeeded in becoming a major player in the monetary market and its regulation thanks to Sayrafa. This platform benefited citizens and the public sector through the dollarization of salaries,” he indicated. He thus asserted that there is no logical basis to accuse Sayrafa of being a platform for money laundering. On the vice-governors’ project to create an alternative platform and/or to abolish Sayrafa, Salameh stated that this project was not viable at this stage and needed time.
Regarding the allegations of manipulating the market, Salameh denied having any control over such actions, asserting that the market trusted his statements. He expressed hope that there would be no disturbances in the market after his departure, and he stressed that he would no longer be involved in decision-making.
Salameh mentioned that the BDL fulfilled all the requirements requested by the International Monetary Fund, including auditing the assets of the Central Bank and implementing banking reforms. “There are some parties that do not want to reach an agreement with the IMF. I do not stand against the Fund, but the agreement that is being developed must be in the interest of Lebanon,” he highlighted. He also clarified that the Alvarez and Marsal audit was not requested by the IMF and that the financial draft received from the Ministry of Finance was not an official report.
Salameh also stated that the Central Bank’s role is not connected to political figures but to the public sector and banks. He added that for a long time, the political class tried to shift blame away from the system and portrayed him as a scapegoat for the country’s financial issues. However, he emphasized that no central bank could withstand the crisis the BDL faced. “The losses that occurred at the BDL are the responsibility of the State which did not settle its debts. People should know that the Central Bank of Lebanon has incurred losses in dollars, and some laws justify this occurrence.” He added, “the Central Bank did not take the dollars of depositors.”
Commenting on the prosecution he is facing, Salameh pointed out that the leaks, especially from the judiciary abroad, were orchestrated by a group that targeted him for specific reasons. “This group hired a lawyer, William Bourdon, who presented a deceitful report on which he relied to file complaints against me.”
He then emphasized that the organized media attack against him aims to put pressure on the judges to make specific targeted and politicized decisions, questioning how a lawyer could claim that Salameh took between one and two billion dollars when there is a significant difference between the two figures.
He said, “I did not appear before the French judiciary as Marianne Howayek did because I was not properly notified. The lawyer in France requested Judge Aude Buresi to formally notify me, but she refused and asked for an international arrest warrant. We are still in the investigation phase in Europe, and there are no lawsuits. If I had been properly notified, I would have appeared before the court. I am ready to go to Switzerland for questioning. I have no problem representing myself before the Lebanese judiciary. Both locally and abroad, we are still in the investigation phase, but unfortunately, the media has already issued accusatory judgments,” he deplored.
At the end of the interview, Salameh insisted that “Forry has not received any financial amount from the Central Bank,” when asked about the ties between the BDL and his brother Raja Salameh’s financial company. He also denied the claims about an alleged relationship with Marianne Howayek, a former BDL director: “Ms. Howayek did not build her wealth from the Central Bank or me. She has undertaken significant projects at the BDL, which the International Monetary Fund has acknowledged, and my relationship with her is purely professional.”
