Lebanon foreign reserves down by $2 billion, police raid central bank governor's home

Lebanon foreign reserves down by $2 billion, police raid central bank governor's home
The governor of Lebanon's central bank, Riad Salameh said that the country's foreign reserves had dropped by $2.2 billion in 2022. As his comments aired on television, police raided his home as part of a probe into alleged corruption.
2 min read
22 June, 2022
Riad Salameh is being investigated for financial misconduct and corruption [Getty]

Lebanese central bank governor Riad Salameh said Tuesday the bank's foreign currency reserves had dropped by $2.2 billion so far in 2022 to about $11 billion, about a third of the level three years ago.

Salameh made the comments during a recorded interview with Lebanon's LBCI TV. As the interview aired, state security forces were raiding a home he owns northeast of Beirut as part of a judge's probe into alleged misconduct and corruption.

Once celebrated as a financial wizard, Salameh has been on the defensive since 2019, when Lebanon slipped into an economic meltdown that has seen the currency lose more than 90% of its value.

Lebanon had more than $30 billion in foreign currency reserves when that crisis began, but Salameh said the amount was now a third of that.

"The Central Bank (reserves) have shrunk by a net of 2.2 billion dollars since the end of the year," he said on Tuesday.

"We will have more than 11 billion that we can use."

He said that the central bank would propose to a newly-formed cabinet a law to issue bills in larger denominations to make the pound easier to use given the devaluation.

Live Story

Lebanon is set to name a new prime minister on Thursday, who would then be tasked with forming a new government. The process is often drawn out and can take months of horse-trading before a consensus is reached.

Salameh also said in the interview he was in favour of maintaining banking secrecy in Lebanon, where banks have severely restricted access to hard currency for most depositors.

The statement contradicts the position of Lebanon's deputy prime minister Saade Chami, who told Reuters he was "not seeing any benefits to keeping" banking secrecy in the country.

The International Monetary Fund had also set a "reformed banking secrecy law to bring it in line with international standards" as a precondition for access to relief funds for Lebanon.