Lebanon’s central bank not bankrupt: Governor

BEIRUT, Lebanon

Lebanon’s Central Bank Governor Riad Salameh has denied that the bank has gone bankrupt, indicating that the losses are “under processing.”

Salameh's denial came in a Monday statement issued by the Central Bank in response to statements by Lebanese Deputy Prime Minister Saadeh al-Shami, who said on Sunday that the state and the central bank have gone bankrupt.

"The governor of the Banque du Liban is interested in clarifying that what is being circulated about the bankruptcy of the Central Bank is incorrect," Salameh said.

"Despite the losses that afflicted the financial sector in Lebanon, which are under treatment in the recovery plan that is currently being prepared by the Lebanese government in cooperation with the International Monetary Fund, the Banque du Liban is still exercising its role and will continue to do so," he added.

On Sunday, al-Shami said in an interview with the local Al-Jadeed TV channel that “the state has gone bankrupt as did the Banque du Liban, and the loss has occurred, and we will seek to reduce losses for the people."

He said the losses will be distributed among the state, Banque du Liban, banks, and depositors.

Since late 2019, Lebanon has been grappling with a severe economic crisis, including a massive currency depreciation as well as fuel and medical shortages.

The Lebanese currency has lost 90% of its value, eroding people’s ability to access basic goods, including food, water, healthcare, and education, while widespread power outages are common due to fuel shortages.

Cash withdrawals in foreign currency in Lebanon have been strictly limited since 2019 due to the ongoing economic crisis.

*Writing by Mahmoud Barakat