“Lebanon’s banks will not go bankrupt and deposits are secure but the country needs foreign support to pull itself from the crisis,” central bank Governor Riad Salameh said on Thursday, amid the deep financial strains that are currently paralyzing the Lebanese public, their movement, and their businesses.
As the country continues to suffer an acute US Dollar shortage coupled with the worst economic conditions since its Civil War, Riad Salameh stated: “Let’s be realistic, Lebanon is in need of foreign support.” (How happy are we that someone is finally telling us the truth?).
That was Salameh speaking to broadcaster MTV in his first extended remarks in nearly two months.
Since Former Prime Minister Saad Hariri resigned on October 29, 2019, in response to the unprecedented demonstrations against the country’s elite, Lebanon has failed to form a new government. It also failed to put forward a reform agenda needed to win foreign support – even through Hassan Diab was seen by many as a promising contender.
Foreign donors pledged $11 billion in project finance to Lebanon in 2018 but made it contingent on Beirut carrying out long-delayed economic reforms. And to everyone’s basic knowledge and common sense, Lebanon has failed to do this.
In his interview, Salameh said the financing “could come from these foreign donors and wealthy Gulf Arab states,” and that “contact with the International Monetary Fund (IMF) had so far been limited to talks with the Prime Minister over technical support.”
Salameh said Lebanon’s banking sector would enter a “new phase,” elaborating that “the expansion that happened by the banks, specifically abroad, will be reviewed and the banks will regroup themselves and their capacities in Lebanon.”
Salameh also assured that Lebanese Central Bank had $31 billion in liquidity and was ready to step in to secure liquidity demanded by banks for their depositors.
He said Lebanon can “recover quickly” because a big part of its economy is generated abroad – a clear reference to the remittances that enter into Lebanon from Lebanese working abroad, and which have kept the country afloat for decades.
Well, Salameh seems to be feeling good. So, in the meantime, I guess we should all just not exceed our little “bank allowances” and be quiet until this blows over? Genius.
