Turbulence in Lebanon's Central Bank: Deputy governors set to step down

Sources closely monitoring Lebanon's Central Bank governance confirmed, according to Addiyar, that the deputy governors will submit their resignations next Monday, headed by Deputy Governor Wassim Mansouri, driven by his political reference, but also the second and third deputy governors, who, according to the information, fear, and prefer not to take, responsibility. 

This article was originally published in, translated from the Lebanese newspaper Addiyar. 

Professor Jassem Ajaka, an economist at the Lebanese University, explained that the plan of the deputy governors mirrors that of Deputy Prime Minister Saadeh Al Shami, aligning with the International Monetary Fund's approach.  

However, the plan includes an additional demand concerning the right to dispose of mandatory reserves, specifically the remaining depositors' funds in the Central Bank. 

Ajaka further commented that implementing the plan is nearly impossible due to the deep reforms it entails, which are currently hindered by ongoing political disagreements.  

He stressed that "scrapping the Sayrafa platform would be disastrous for Lebanon in the absence of any alternative that allows control over the exchange rate." 

In the meantime, ministerial sources told Addiyar that the Central Bank's governance issue will be raised during the government sessions scheduled to discuss the 2023 budget, spanning an entire week. 

The sources anticipate a proposal to extend Riad Salameh's tenure as the Central Bank governor until a president is elected. However, opposition is expected from Deputy Prime Minister Saadeh Al Shami, backed by ministers from the Free Patriotic Movement.  

Consequently, reaching a decision may take more than one session. These sources believe that an extension is necessary as the deputy governors are seemingly incapable of managing the monetary file during this sensitive period, which will likely last for several months at the very least.