Lebanon rules out extension of central bank governor’s term

REUTERS/Mohamed Azakir

Lebanon’s caretaker premier, Najib Mikati, will not extend the term of central bank governor Riad Salameh when it ends later this month, the prime minister’s office said.

The July 31 expiration of Salameh’s term will bring to an end a 30-year tenure stained by recent charges at home and abroad of embezzlement of Lebanese public funds. Salameh denies the charges.

In response to questions from Reuters, Mikati’s office said his position was based on current legislation which stipulates that the first vice governor would assume the governor’s duties until a new chief is appointed.

“The most important thing is that no vacuum occurs at the central bank because it’s the country’s financial backbone,” the premier’s office said, adding that the institution would continue to function “through the first vice governor” and his peers.

One of Lebanon’s four vice governors told Reuters that all were considering quitting together if no successor is named, raising the possibility of a leaderless central bank amid a deep financial crisis.

Mikati’s deputy, Saade Chami, told Reuters last week that such a threat was “dangerous” and that the vice governors should “assume their responsibility in case this appointment is not possible”.

Efforts to find a successor to Salameh have been hamstrung by Lebanon’s breakdown in governance and intensifying political tensions. Central bank governors are typically appointed by the president, but parliament has been unable to elect a president to follow Michel Aoun, whose term ended in late October.

Parliament speaker Nabih Berri, a longtime backer of Salameh, told reporters on Monday that “necessity allows for that which is prohibited”, signalling that the cabinet should appoint a governor even as it operates in a caretaker capacity.

But Berri said he would “respect what the prime minister announced regarding neither an appointment, nor an extension”.

Many Lebanese blame Salameh for Lebanon’s financial collapse, alongside the long-entrenched ruling elite. Salameh says he has been scapegoated for the meltdown, which followed decades of corruption and profligate spending by politicians.

Salameh has worked hand-in-glove with the elite for years. In late 2021, Mikati signalled Salameh should remain in his post even as the graft investigations against him gained traction, saying “one does not change their officers during a war”.

More recently, Salameh has appeared to be increasingly isolated. The central bank governor, who was once a regular at banking conferences and high-end restaurants, is now rarely seen in public except for occasional media interviews.

He has repeatedly said he would leave when his term ends in July.