| 23 June 2024, Sunday |

Monetary policy anticipation after the Governor of the Bank of Lebanon

With the beginning of the countdown to the end of the Governor of the Banque du Liban’s term, it is expected that the governance file will continue to be the subject of speculation and controversy, and it is noteworthy that last week the four deputies of the ruler were guests in the parliament hall to answer a series of questions posed by members of the Administration and Justice Committee, particularly those related to the basic financial and monetary measures that were implemented in Lebanon.

Indeed, policies and actions are likely to be implemented in the following stage, following the conclusion of the ruler’s tenure, particularly with regard to an exchange platform and the prospect of utilizing the Central Bank’s remaining foreign currency reserves.

The second meeting, conducted last Thursday, was identical to the first, and it produced no conclusions. The surprise was that the four deputies presented the governor with a financial reform plan, prompting George Adwan, Chairman of the Administration and Justice Committee, to schedule a third session next week in order to approach the proposed plan and reach the minimum common denominators.

Financial sources close to the First Deputy Governor of the Banque du Liban, Wassim Mansouri, confirmed to Sawt Beirut International that the latter will carry out his duties and take over the governorship, and he has the ability to do so, through his implementation of his clear plan that he prepared to control the situation, but in return the sources stress his need for international and local political cover to implement the plan.

For its part, the sources of the Administration and Justice Committee of Sawt Beirut International indicate that the governor’s deputies tried during the meeting with the members of the committee to remove responsibility from them, in relation to the decisions taken by the Governor of the Banque du Liban, and considered that the monetary and credit law prevents them from leaking any information or minutes of the Central Council to the public.

However, they announced more than once that they had addressed the Council of Ministers through the Minister of Finance, but they did not get any answer to their objections, which they included in their book in 2022.

The sources pointed out that the governor’s deputies focused on points that hold the Minister of Finance, the government, the Central Council, and the Governor of the Banque du Liban responsible for the financial and monetary decisions taken.

However, the sources ask, how did they decide to disclose now what was happening in the Central Council, despite their dissatisfaction with the measures that were taken, given that the ruler is still in his position today?

However, the sources return to consider that if the words of the ruler’s deputies are accurate, then the Minister of Finance bears a great responsibility, which confirms that he may be in collusion with the ruler, and parliamentary sources reveal that the Administration and Justice Committee summoned the Governor of the Banque du Liban several times to hear from him about the necessities that forced him to take some measures around which some questions revolve, but he was constantly absent from the meeting and contented himself with sending a legal advisor on his behalf.

The sources pointed out to the ruler’s deputies, in a meeting last Thursday, that they declared clearly and explicitly that they wanted to carry out a reform that stipulates not violating the law, while the power was transferred to them in accordance with the Monetary and Credit Law.

Therefore, the sources consider that the situation in the next stage is not easy and we are facing a dilemma, either the constitution will be violated and set aside, in order to continue the current financial stability, or the plan developed by the ruler’s deputies will be implemented and the market will escape.

  • Sawt Beirut International