Everything You Need to Know About Riad Salameh’s Speech

Riad Salameh's Speech
Lebanon Debate

As prompted by Prime Minister Hassan Diab last week, the Governor of Banque du Liban, Riad Salameh, held a press conference to address the Lebanese public.

At noon on Wednesday, April 29th, Salameh opened his speech by assuring the Lebanese that he does not “address with emotions,” but abides by the law and “will disclose the facts and figures at the request of the Prime Minister.”

In response to the Prime Minister

“The central bank has a central council and the board does not convene in the event that the Director-General of the [Economy Ministry] or the Director-General of the [Finance Ministry] is absent,” Salameh started.

The official followed this with a direct response to PM Diab’s critical speech, saying that there is “neither secret nor unilateral information in the spending decisions that the Governor of Banque du Liban can retain.”

“Claiming otherwise,” he added, “is slander intended to mislead public opinion, in order to strengthen the programmed campaign against the Governor personally.”

“I personally delivered bank and auditing accounts to the Prime Minister, on March 9th, 2020,” Salameh continued, pointing out that there are two international companies that inspect the central bank’s accounts and release annual reports.

“There is nothing in our accounts that has not been delivered to the state,” he emphasized.

On state expenditures and debt

Riad Salameh assured that the central bank “did not cost the state any Lebanese pound.” He said the bank had been “recording profits and transferring them to the state immediately.”

According to Salameh, the central bank has also “contributed to reducing Lebanon’s sovereign debt in Paris II, and cutting its expenses through the use of gold spreads.”

“We have respected the Code of Money and Credit, and it cannot be violated,” he then declared. “We have been forced to undergo financial engineering to win time for the state to reform itself, but [the latter] did not happen,” Salameh added.

On people’s deposits

Riad Salameh went on to address the Lebanese public: “We assure them that their deposits are present and operational in the banking sector.”

He noted that a haircut must not be applied, because it would have negative effects on the banking sector and the economy.

“We heard that $5.7 billion were removed from the banking sector; it was actually $5.9 billion out of the original $3.7 billion used to cover loans,” the Governor asserted.

On that, he noted that the equivalent of $2.2 billion in cash was withdrawn from customer accounts in banks, part in Lebanese pounds, and part in dollars. “Therefore, $5.7 billion were not removed from Lebanon.”

On liquidity

“Because there is difficulty in importing due to the reduced supply of dollars, Banque du Liban has responded to the Industry Ministry and placed $100 million, and there are ongoing negotiations with external parties to increase the amount.”

“We have pumped liquidity in Lebanese pounds equivalent to $3 billion and issued a circular to schedule debts, to which we added that banks are able to credit wages at 0%,” Salameh continued.

“We hope that banks implement these circulars because what happened in Lebanon due to coronavirus imposes various measures that are taking place in the whole world,” he added.

On money changers

The Governor of the Central Bank addressed the issue with money changers, whose businesses, as he said, are affected by supply and demand.

“However,” he declared, “we have not stood by; we worked with the money changers, we tried as much as possible to control the price movement, and we attempted, in agreement with them, to create a monetary union in Banque du Liban.”

Finally, Riad Salameh announced: “We are trying to activate the financial markets through an electronic platform that will organize a secondary stock market.”

“It is always important for us to be in coordination with the Lebanese government; Banque du Liban will remain cooperative with the government and the Prime Minister, and we will not be a tool to incite instability,” Salameh concluded.