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Tuesday, Dec 06, 2022

Lebanon central bank not bankrupt - Governor

Lebanon central bank not bankrupt - Governor

The Governor of the Bank of Lebanon, Riad Salameh, denied "what is being circulated about the bankruptcy of the Central Bank, and considered that this is not true."
In a statement, Salameh said that despite the losses that afflicted the financial sector in Lebanon, which are under treatment in the recovery plan that is currently being prepared by the Lebanese government in cooperation with the International Monetary Fund, the bank of Lebanon is still exercising its role entrusted to it under Article 70 of the Monetary and Credit Law.

Lebanese media had quoted the Lebanese Deputy Prime Minister, Saadeh Al-Shami, as saying on a TV program that the Lebanese state and the Central Bank of Lebanon are bankrupt.

Asked about Chami's comments earlier in the day, Prime Minister Najib Mikati said he believed his deputy was speaking about "liquidity, not solvency," a statement from his office said.

Lebanon is in the third year of a financial implosion caused by decades of corruption and bad policies that has led the currency to crash in value by more than 90% and banks to lock most savers out of hard-currency accounts. A draft government financial rescue plan earlier this year estimated a roughly $70 billion hole in the financial sector.

The World Bank estimates Lebanon's economy to have contracted by nearly 60% between 2019 and 2021, in what it has called one of the worst financial crises in modern times.

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