Egypt Independent

Lebanon central bank official probed over currency crash



BEIRUT (AP) — Lebanon’s financial prosecutor questioned a top central bank manager Friday over the country’s financial crisis, which has included a free fall in the value of the country’s currency, a judicial official said.

Mazen Hamdan, the head of cash operations at the bank, is the most senior official to be interrogated in an ongoing probe into possible financial wrongdoing. The prosecutor ordered him to appear for questioning about what Lebanon’s official news agency called “the manipulation of the dollar exchange rate.”

The judicial official said Hamdan had not yet been formally charged. He spoke on condition of anonymity because he was not authorized to brief reporters on the ongoing investigation.

Central bank officials had no immediate comment.

Lebanon is experiencing an unprecedented economic and financial crisis. This week, the government began talks with the International Monetary Fund to negotiate a bailout amid the currency crash, a liquidity crunch, negative economic growth and soaring inflation. The government has said a controlled float of the currency is inevitable.

In recent days, authorities have cracked down on currency exchange bureaus as the Lebanese pound, pegged to the dollar for more than 20 years, lost 60 percent of its value in weeks. A number of money dealers and the head of their union were arrested and officials closed down some bureaus for operating without licenses. They accused others of violating orders from the central bank to trade at a new controlled rate.

The measures to contain the currency free fall, including a cap on external transfers and adjusted exchange rates for dollar withdrawals from banks and money transfer bureaus, have created chaos on the black market and sowed panic among the public.

The interrogation of Hamdan comes amid an unprecedented public spat between the head of the government and the governor of the central bank. Prime Minister Hassan Diab has held Riad Salameh responsible for the downward spiral of the national currency, accusing him of pursuing “opaque” policies that sent the pound crashing. Salameh defended himself, saying he is taking all necessary measures to contain the crisis and blamed politicians for misspending bank finances to pay down massive state debt.

Image: Lebanese riot police wear masks to help curb the spread of the coronavirus, as they stand guard in front the central bank building, where the anti-government protesters protest against the Lebanese central bank’s governor Riad Salameh and against the deepening financial crisis, in Beirut, Lebanon, Thursday, April 23, 2020. (AP Photo/Hussein Malla)