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Lebanon Central Bank governor blames 'systematic campaign' amid criticism of his role in crisis

Riad Salameh has been widely criticised over his role in handling Lebanon's crisis [Getty]

Date of publication: 29 April, 2020

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Riad Salameh has alleged that there is a 'systematic campaign' against him.

Lebanon’s Central Bank governor defended himself Wednesday against scathing criticism, claiming there is a “systematic campaign” meant to hold him responsible for the country’s recent financial crisis and the collapse of the national currency.

Speaking in an hour-long video conference, Gov. Riad Salameh, who has held the post since 1993, said he did what he had to do to maintain Lebanon's monetary stability in the face of various crises over the past years. He blamed politicians for reneging on repeated promises of reform.

The speech came after a day of violence, when hundreds of protesters in the northern city of Tripoli clashed with troops until late Tuesday night, leaving several injured on both sides in some of the most serious riots triggered by the economic crisis spiraling out of control amid a weeks-long virus lockdown.

Salameh was responding to accusations made by Lebanese Prime Minister Hassan Diab last week in which he held the governor responsible for the downward spiral and accused him of pursuing “opaque” policies that sent the pound crashing against the dollar.

Diab urged Salameh to speak openly to the public about the financial crisis, hinting that the governor has intentionally engineered the crash of the pound.

Salameh rejected the accusations, saying Wednesday there was nothing opaque and that he had handed over requested information to the prime minister on April 20. He said that while it was true that the Central Bank has financed the government, it is the government that spent the funds.

The Central Bank currently has 20 billion dollars in reserves, Salameh said and reassured the Lebanese that their bank deposits were safe and that the state would not intervene to take a cut of their money to cover its debts.

The Lebanese pound has been on a downward trajectory for weeks amid a worsening liquidity crunch and an economic slump. But it appeared to be in a free fall over the last few days, selling as low as 4,000 pounds to the dollar, down from a fixed peg of 1,500 pounds to the dollar in place for 30 years.

The tiny Mediterranean country of about 5 million people is one the most indebted in the world. Nationwide protests broke out in October against the government because of widespread corruption and mismanagement of resources.

Diab’s government came to office in January and was quickly engulfed in a nationwide health crisis over the novel cornavirus, a crisis that deepened the country’s economic recession. The Lebanese authorities have reported more than 700 cases and at least 24 deaths from the pandemic.

Agencies contributed to this report.

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