Lebanon central bank chief: banks are solvent, no ‘haircut’


Lebanon’s central bank governor Riad Salameh said on Thursday the country’s banks were solvent and there would be no “haircut” amid a deep financial crisis that has shaken confidence in banks. 

Lebanon’s Central Bank Governor Riad Salameh speaks during an interview with Reuters at his office in Central Bank in Beirut, Lebanon October 24, 2017.REUTERS/Jamal Saidi – RC1D7B748890

Speaking to broadcaster MTV, Salameh said the central bank was trying to protect depositors and a lack of liquidity at banks was not on the scale of people’s fears. 

Pointing out that it is his responsibility to “preserve the current structure” and the “continuity of the Lebanese state,” Salameh noted that the central bank had financed the state “on the hope that there would be reforms.”

He also blamed the financial and economic woes on the country’s presidential vacuums, the delay in the formation of its governments and the failure to reform its electricity sector.

Asked about the latest reports about the alleged transfer abroad of huge sums of money by a number of politicians, Salameh said: “We’ll send teams from the central bank’s Special Investigations Commission to the banks to explore the outcome of investigations into the transfers and we will then send the result to the state prosecutor so that he takes the necessary measures.”

Salameh also ruled out a “revolution of the hungry,” but noted that poverty is expected to increase, urging measures.

He said the central bank remained convinced of keeping the Lebanese pound rate fixed.

The pound dollar exchange rate was reportedly today 2450LL per US dollar while the pound is pegged at 1507.5 per US dollar which represent a drop of nearly 40 %