Banque du Liban's first deputy governor Wassim Mansouri during a press conference on July 31, 2023. (Credit: Screenshot LBCI)
BEIRUT — Banque du Liban's first deputy governor Wassim Mansouri announced Monday he would take over as acting leader of BDL as controversy-addled governor Riad Salameh stepped down from his 30-year term.
At a press conference in Beirut, Mansouri said that “BDL must completely stop financing the government outside of a legal framework," and that lawmakers must pass a capital controls law and 2023 budget.
“If we continue with the same approach, the reserves of the Banque du Liban (BDL) will be depleted,” he added.
“We must move to another policy, which is to stop the policy of financing the state completely, and no disbursement of government funding will ever be signed outside my convictions and outside the legal framework,” Mansouri said.
“Currently, this financing covers the salaries of civil servants, funding for certain medications, the salaries of security forces and the individuals responsible for revenue collection for the government,” Mansouri explained.
“It is urgently necessary to approve the laws mentioned in the previous plan within the next six months. Among these laws are the 2023 budget, capital controls and the restructuring of the banking sector. There will be no monetary recovery without these laws,” he stressed.
Mansouri also called for the "liberalization and unification" of the lira-t0-dollar exchange rate and said BDL's Sayrafa platform exchange rate would be phased out, though the salaries "of the most vulnerable individuals" would be paid in dollars at the Sayrafa rate during an intermediary period.
“The exchange rate must be unified and floating without requiring BDL intervention. This process should take place gradually, in agreement with the government, with whom we will start discussions tomorrow [Tuesday],” Mansouri said.
He stressed that BDL, Parliament and cabinet would need to work together to set up a new comprehensive plan.
“To politicians, I ask that you no longer link monetary matters to political maneuvering,” Mansouri concluded.
Salameh leaves behind financial system in tatters
In his wake, Salameh leaves behind a countrywide financial system in tatters and faces several corruption probes both in Lebanon and abroad.
Before ending his term Monday, Salameh had no formal successor in place, leaving BDL's four deputy governors to stand in.
Lebanon's main Christian parties, as well as Hezbollah, are opposed to appointing a new BDL governor — a power usually reserved for the country's president — during a presidential vacuum.
The country has been without a head of state since October 2022, when Michel Aoun's term ended with no successor in place. Critics of Berri and Mikati accuse them of taking on certain presidential powers in the meantime.
Appointed in 2020, BDL's four deputy governors Wassim Mansouri, Bachir Yakzan, Salim Chahine and Alexandre Moradian have urged the government to appoint a new central bank head before the end of Salameh's term. They met twice this week with Mikati.
In the event of a vacancy, Wassim Mansouri, who is Shiite, was expected to replace Salameh, although this post is traditionally reserved for a Maronite. The deputy governors have threatened to resign if a successor is not duly appointed, but later backtracked.
Deputy Prime Minister Saade Chami said last week that the government was not in a position to appoint a successor to Salameh.