Yesterday evening, the governor of the Banque du Liban Riad Salamé celebrated the anniversary of the renewal of his mandate at the head of the Banque du Liban with a television interview broadcast on the airwaves of the Al Haddath channel. There emerged a governor of the Banque du Liban always sure of himself, always in the denial of an economic policy which led us to the current catastrophe, which thinks to have saved the local financial sector, without seeing that, moreover, this policy monetary has been harmful.
#Lebanon could have started recovering from the crisis if the government did not default on the payment of foreign dues and if a government capable of implementing reforms was formed, Central Bank governor Salameh says in an interview with Al Hadath. https://t.co/JWBIpfNAoP– Al Arabiya English (@AlArabiya_Eng) May 25, 2021
Riad Salamé seems to have forgotten the very principles of an economy, that which consists in building it by productive sectors and not by debt until transforming it into a fictitious economy always putting the responsibility for the situation on the authorities and in denial. of hers. It is certain that it is hard for a person suffering from a disproportionate ego to admit his faults.
Actor of the crisis, it was undeniably so by not playing its role which consists in protecting the money both of the Banque du Liban, the largest creditor of the state today, and that of the local depositors. and foreigners. The situation of a state of default was inevitable since the reversal of financial flows in January 2019, something that he still does not seem to admit. It is indeed hard to be wrong too.
Moreover, should we remind him that the difficulties appeared in May 2019, after gasoline importers had the greatest difficulty in obtaining foreign currency? Should we remind him that the dollars were generally unavailable for withdrawal in the summer of 2019, when the state of default did not occur until April 2020? He should also revise a little
The Lebanese pound was a strong currency, he said. He seems to forget that econometrics models showed more than a pound at 3,000 LL / USD at the time and not at 1,500 LL / USD. This overvaluation has serious consequences, such as limiting the necessary economic growth, an evil that Lebanon suffered from for some time, but also destroying jobs, pushing more people into exile, and exile. which still fed this Ponzi scheme that he set up without also knowing or recognizing the Dutch disease that he led, that is to say to feed an overvaluation of a currency by the export of a commodity, here our gray matter to the detriment of other productive sectors, until the collapse.
According to him, the banking system survived the crisis. This bell sounds different for the Lebanese population or for the foreigner for whom all the Lebanese banks are insolvent, including the Bank of Lebanon itself, unheard of, because of the financial engineering operations that it has never seen before. bring.
He continues to wish he wanted to create the illusion but how long can a mirage last when these illusions no longer last, promising depositors to release $ 50,000 as early as June but forgetting to give the details. This will be $ 50,000 over 3 years and not immediately according to the information currently available. The sums currently available are all the more insufficient as the monetary pressure exerted by the end of the subsidy program for the purchase of basic necessities could indeed dry up even more quickly the possible sources of foreign exchange and that therefore the parity of the Lebanese pound against the dollar should continue to unscrew except from incoming financial flows conditional on economic aid itself depending on an audit of the Bank of Lebanon accounts that it has long refused.
The Banque du Liban therefore struggles to understand that beyond even bank accounts, there is an essential question linked to the survival of the population. Money locked in bank accounts does not allow people to live let alone eat.
Talking about the fact that Lebanese banks have not collapsed is ubiquitous. Let us be clear, they are bankrupt just as much as the Bank of Lebanon or the Lebanese state itself is. They are bankrupt because the Bank of Lebanon itself failed to protect the savings of the population and to continue to finance the public debt as it could have acted. Words are fine, but deeds are better.
In short, a magician who seems to use words to assure people who do not know the reality of the situation. But by dint of promising the impossible, no one ends up believing it.