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The New Arab Staff

Lebanon Central Bank governor responds to accusations of inflated assets

Salameh has been widely blamed for his perceived mishandling of Lebanon's currency crisis [Getty]

Date of publication: 25 July, 2020

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Riad Salameh denied recent accusations of intentionally concealing the central bank's losses, after being charged with "undermining the financial status of the state" and embezzlement.
Lebanon's central bank governor Riad Salameh on Friday said financial engineering carried out by his institution did not intend "to make its financial position seem stronger or to conceal losses".

Salameh's comments to local media outlets came in response to accusations that he had inflated the central bank's assets by $6 billion in 2018.

Salameh claimed his actions as governor were "in line" with accounting policies approved by the bank's board of directors.

Salameh has been widely blamed for his perceived mishandling of Lebanon's currency crisis, but has repeatedly denied responsibility and had claimed to be a victim of a coordinated "campaign" against him.

Just days after a Lebanese judge ruled to seize Salameh's assets and properties, Reuters published a report claiming that Salameh inflated the institution's assets after reveiwing audited annual accounts.

The lawsuit charges Salameh with "undermining the financial status of the state, urging the public to withdraw funds deposited in banks and sell state bonds, in addition to job negligence and embezzlement".

With Salameh's help, the bank managed to balance its books while helping to fund an ever-widening government deficit, including recording a 10.27 trillion Lebanese pound ($6.82 billion) asset described as "seigniorage on financial stability", the Thursday report said.

Read also: Comment - Lebanon: Adrift in stormy seas

In his statement on Friday, Salameh that "many central banks resort to delaying costs to achieve their goals" and that for the past 15 years, the BDL had been operating under "exceptional circumstances", without further elaborating.

In April, the governor gave a rare televised speech to defend his record after being publicly accused by Prime Minister Hassan Diab of failing to take action to stop the economic crisis, the worst in Lebanon since its civil war ended decades ago.

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