Lebanese central bank Governor Riad Salameh said for the first time he plans to leave after his term expires later this year, bringing to an end a three-decade tenure marked by controversial policies that have been blamed for the country’s financial implosion.
(Bloomberg) — Lebanese central bank Governor Riad Salameh said for the first time he plans to leave after his term expires later this year, bringing to an end a three-decade tenure marked by controversial policies that have been blamed for the country’s financial implosion.
Salameh, 72, who’s also the target of international investigations into money laundering and embezzlement, told Asharq TV in an interview on Friday that he won’t seek a new term. The veteran banker maintained his innocence and said he has the documents to prove it.
“The decision for me is that when the term ends, it will be a turned page in my life and I will pursue things outside the central bank’s work,” Salameh said in the interview.
The departure will open a new chapter in a crisis labeled by the World Bank as one of the worst globally since the mid-19th century. Known on Wall Street and in foreign capitals, Salameh has been one of the few constants in Lebanon as Beirut wrestled with war, debilitating political standoffs and an economic meltdown.
Salameh, who was a private banker at Merrill Lynch before becoming governor in 1993, played a key role in maintaining Lebanon’s currency peg for over two decades before it unraveled in late 2019.
Read more: Lebanon’s 90% Devaluation Leaves Pound Trailing Black Market
Lebanon defaulted on $30 billion in international debt almost two years ago and saw its economy crater, with a combination of triple-digit inflation and a currency meltdown wiping out people’s life savings. The crisis put the spotlight on policies overseen by Salameh, including the so-called financial engineering that the central bank began in 2016 to boost its reserves.
The decision not to seek another term could also inject even more volatility by forcing politicians to find candidates for a position reserved for the Maronite Christian community as part of Lebanon’s sectarian power-sharing arrangement. The law stipulates that if the seat is vacant, the first vice governor — who’s a Shiite Muslim — would take over until a permanent replacement is named.
Lebanon has been under a caretaker government since last year. The vacancy in one of the highest-profile posts in Lebanon will heap pressure on authorities to identify a possible successor.
Corruption Probes
The crisis in Lebanon also left Salameh facing corruption allegations.
The outgoing governor is one of the suspects in a joint investigation by France, Germany and Luxembourg that’s probing money laundering and embezzling public funds in Lebanon between 2002 and 2021. A European judicial delegation visited Lebanon last month and questioned bankers and former central bank officials.
Swiss authorities are also looking into allegations that Salameh benefited from the sale of Lebanese Eurobonds held in the central bank’s portfolio, Bloomberg reported in early 2021. Also of interest to authorities is the relationship between Raja Salameh and the brokerage firm Forry Associates Ltd., which allegedly charged commissions on the sale of Eurobonds to investors.
Salameh has repeatedly denied the allegations and has said they’re part of a media campaign to tarnish his image. He’s said that his fortune was amassed during his previous career in finance.
In the interview, Salameh said he has proof that “not a dollar from the central bank’s money” was transferred to Forry and that his brother’s association with the firm is a coincidence.
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