Salameh sees no need
to haircut bank deposits
“There has never been a haircut
on deposits anywhere in the world”
“The deposits are here and there is no need for a haircut,” said Riad Salameh, Governor of the Central Bank (BDL). “Such talk creates panic. There has never been a haircut on deposits anywhere in the world,” he said.
In a televised statement, the governor said that he is responding to a public request from the Prime Minister. “The Central Bank would like to cooperate with the government but it is not legally required to get its approval on the circulars it issues. This would be a violation of its independence,” he said.
Salameh said that deposits are still available in the banking sector and that BDL opposes the bankruptcy of any bank because it wants to protect depositors.
According to Salameh, the liquidity available at BDL currently exceeds $20 billion. He denied allegations that $5.7 billion were transferred abroad in the year 2020. He said internal money transfers are normal.
He said that BDL was reporting profits in previous years which were transferred to the State and that he submitted the Central Bank’s accounting records to the Prime Minister on March 20, 2020.
According to Salameh, the main cause of the crisis was the accumulated deficit in the balance of payments which reached $18 billion over the period 2015-2019.
The Central Bank is convinced of the necessity of stabilizing the exchange value of the national currency.
Salameh said that all decisions of the Central Bank in the past years were approved by its board which includes the director generals of the Ministry of Finance and the Ministry of Economy and Trade. There is also in attendance a representative of the government. BDL accounts are audited by two international companies, according to best practice for central banks.
Reported by Shikrallah Nakhoul
Date Posted: Apr 29, 2020