Lebanon's Central Bank crisis: Unanswered questions and hidden agendas

The discussions and deliberations initiated by the parliamentary committee of Administration and Justice with the four deputies of the Central Bank Governor have not concluded and will continue in the coming days, according to statements made by both the committee's chairman, Deputy Georges Adwan, and the first deputy governor, Wassim Mansouri.

This article was originally published in and translated from Lebanese newspaper Nidaa al-Watan.

During Thursday's committee session, some referred to a plan distributed by the governors to the deputies in the presence of Deputy Prime Minister Saadeh Al-Chami, which sparked numerous questions and inquiries that went unanswered.

For example, some of the questions raised were: Why was this plan delayed until now? Why was it distributed in English to the deputies and translated during the session? Are the committee and the Parliament the two entities responsible for making decisions? Why is there no coordination with the government, which is supposed to be responsible for financial policy? Why did some deputies speculate about the USD exchange rate reaching LBP 300,000 or 600,000?

Despite the secrecy agreed upon by the committee's chairman and members, the information available suggests many contradictions and implications of a "hidden agenda" that could lead to extending the term of Central Bank Governor Riad Salameh until the president's election.

According to the available information, Mansouri is hesitant about the situation and the responsibility on one hand, while having a plan on the other, seeking political cover from the forces and parties represented in the Parliament, even if the Monetary and Credit Law grants the Central Bank deputies the opportunity to act and implement their plan in coordination with the government.

Sources from participants in the committee meeting told Nidaa Al-Watan that "what is happening is an attempt to involve the Parliament in bearing responsibility, even though all that is being asked is the government's responsibility."

However, during the committee session, the questions were directed to the Central Bank deputies, which they refused to answer, citing the secrecy of the deliberations imposed by the Monetary and Credit Law.

Moreover, deputies from the "Democratic Gathering" and "Development and Liberation" blocs demanded the appointment of a new Central Bank governor to manage the work.

Additionally, this session had a complete absence of "Hezbollah" deputies. Some also demanded that the caretaker Prime Minister, Najib Mikati, cancel his trip and return immediately to Lebanon to assume his responsibilities.

Member of the committee, Deputy Ghada Ayyoub, told Nidaa Al-Watan: "The Central Bank deputies are demanding a comprehensive reform plan through the paper distributed to the deputies, starting with the approval of the 2023 budget, as well as the 2024 budget, restructuring the banks, financial regularization, exchange rate liberalization, and the approval of capital controls."

"However, all of these topics and preparations fall within the government's jurisdiction, so it seems like they are asking the Parliament to perform the role of the government," she explained.

She continued: "The first deputy governor of the Central Bank read a letter during the first committee session on behalf of the four deputies, stating that he sent it to the government through Finance Minister Youssef Khalil on February 22, 2022."

He said it contained their objection or refusal to the policies and procedures of the Central Bank governor and that they did not receive any response from the government.

Moreover, it said that they assumed their responsibilities in June 2021, and the Sayrafa exchange platform was already established and operational, as well as circular 151. This indicates that the government is planning with the Central Bank governor, and the Sayrafa was not presented to the Parliament for questioning at the time."

In the presence of the Central Bank deputies, Mansouri said: "What has been done at the Central Bank and the needs of the upcoming phase were presented, and the most important thing is the interest of all segments. We will wait for communications and update you on what has occurred."