What happens in Lebanon? Diab attacks the governor of the central bank and talks about suspicious moves on the black market

Lebanese Prime Minister Hassan Diab said that the deterioration of the exchange rate of the Lebanese pound is accelerating suspiciously in the black market, adding that there is a dilemma that is ambiguous in the performance of the Governor of the Banque du Liban Riad Salama regarding the deterioration of this crisis.

Diab asserted in a speech after a session of the government that he would not allow people to steal their money again by raising the exchange rate of the dollar. He also stressed that the government will not tolerate suppressing all tampering with financial stability, and that "the state will strike firmly."

Diab directed an unusually strong criticism of the governor of the Central Bank, questioning his performance after a sharp depreciation of the lira, and called on him to provide clarification to the Lebanese.

Diab painted a bleak picture of the central bank’s finances, pointing to data indicating "accelerating" losses, as seven billion dollars have been lost since the beginning of the year, including three billion in the last four weeks alone.

The Prime Minister warned that the liquidity of banks already suffering from a liquidity crisis "started to run out", as Lebanese deposits worth $ 5.7 billion from the system exited in January and February, despite tight restrictions on withdrawing the green currency and transferring abroad amid a crisis Sharp liquidity.

He said that there are major gaps in the Banque du Liban "a performance gap, a gap in strategies, a gap in openness and clarity, a gap in monetary policy and a gap in accounts."

"Let the governor of the Banque du Liban come out and announce to the Lebanese the facts frankly, why is what is happening? What is the horizon of the treatment? What is the ceiling of the dollar's rise?"

Commenting on these statements, former Prime Minister Saad Hariri said that what he described as the revolutionary mind bore responsibility for the collapse of the Governor of the Banque du Liban and specific political parties, adding that Diab's words confirmed the government's involvement in the retaliatory approach that prevailed since the late 1990s.

For its part, the French Press Agency quoted a source close to the government as saying that the bulk of it was transferred abroad. "Part of it was probably withdrawn and saved inside the houses, with the aim of daily use and consumption," he said.

"Given that withdrawals through the fund were limited to relatively small amounts during that period, it can logically be concluded that a large portion of the $ 5.7 billion left the country," the source added.

what happens?
According to previous official estimates, during the last two months of 2019, $ 2.3 billion was transferred abroad, after an unprecedented public protest against the political class accused of corruption and the deteriorating economic situation. And the operations were carried out at the time despite the prevention of the transfer abroad.

Last month, Lebanon faltered on its heavy foreign debt obligations, declaring that it could no longer pay the depositors while maintaining liquidity for the necessary imports.

Several political forces, headed by Hezbollah, bear the responsibility for the deteriorating financial situation, and the party recently reiterated its demand for the financial and accounting audit of the Bank of Lebanon.

Salama, who won regional and international awards in recognition of his efforts in office, was considered as the godfather of the stability of the lira and architect of financial policies in the post-civil war period (1975-1990). He has long been known for his cautious monetary policies.

The exchange rate of the Lebanese pound fell sharply against the dollar, which touched the threshold of four thousand pounds in the parallel market for the first time ever.

This comes while the official rate set by the central bank for the dollar remains at 1,500 liras. This major deterioration in the Lebanese currency has led to a significant increase in commodity prices.