Lebanon’s central bank will not print money to lend state: Governor

• Raven Ruma
• . August 25, 2023
• . Update: August 25, 2023 6:03 pm
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Wassim Mansouri, the acting governor of Lebanon’s central bank, has said that the central bank will not print money to lend the state. 

On Friday, Wassim Mansouri called on financial leaders to undertake urgent financial reforms. He said that the bank would not print money to cover the economy’s projected deficit. 

He told a press conference at the central bank, “We affirm today that the central bank will not cover the deficit by lending to the government, neither in dollars nor in Lebanese pounds.” He also revealed that the draft budget for 2023 included a state deficit of 24 per cent, which accounted for 46 trillion Lebanese pounds. The acting governor highlighted that 46 trillion Lebanese pounds amount to about $500 million at the parallel rate because of the collapsed Lebanese pound.

Wassim Mansouri reportedly said that the government would pay public sector employees salaries for August in the United States dollars. 

Wassim Mansouri became the acting governor of the central bank on August 1 after Riad Salameh ended his 30-year tenure because of corruption charges. However, Riad Salameh repeatedly denied corruption allegations.

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Lebanon’s economy has been suffering since 2019. The Lebanese pound started devaluing against the US dollars. The population has been pushed into poverty. The Beirut port explosion in 2020 further impacted the lives of the people. The COVID-19 pandemic along with the Beirut port explosion increased poverty in the country.

Lebanon also failed to enact reforms demanded by the International Monetary Fund (IMF), a major financial agency of the United Nations, to get $3 billion in financial aid in order to solve the financial crisis.

Earlier this year, Financial Action Task Force, an intergovernmental organisation, said that Lebanon could be placed on a grey-list over unsatisfactory practices to prevent money laundering. 

However, in June, the financial crime watchdog did not put Lebanon on its “grey list.”