Lebanon central bank head says financial crisis can be contained after he leaves

BEIRUT - Lebanon's outgoing central bank governor Riad Salameh told Reuters on Friday the bank could still contain the country's financial meltdown through "monetary initiatives" after he leaves office at the end of the month.

Salameh, 73, again pledged to leave when his term ends on Monday, his 30-year-tenure tarnished recently by the economy's spectacular collapse and charges in Lebanon and abroad over accusations he embezzled a fortune in Lebanese public funds.

In written comments to Reuters on Friday, Salameh said he had acted according to the law and said his lawyers had filed legal objections in France and Germany, which have charged him.

"As I leave and despite the crisis that was expected to create a total collapse, the central bank could through monetary initiatives contain this crisis," he said.

Salameh said Lebanon's economy had grown by 2% last year and could expand by as much as 4% in 2023, but he provided no more specific metrics.

The meltdown has cost the local currency roughly 98% of its value, seen GDP contract by 40% and pushed inflation into triple-digits, according to the International Monetary Fund.

Lebanon's political class has been unable to name a successor to Salameh, risking even more dysfunction in a state already hollowed out by years of political paralysis and financial turmoil.

According to Lebanese law, the first vice governor Wassim Mansouri will take over in the absence of a successor.

Mansouri and three other vice governors have proposed a host of measures, including expedited legislation to reform the banking sector and institute capital controls, and lifting the decades-old peg of the Lebanese pound.

But the political elite has resisted reform measures in recent years, casting a shadow of uncertainty over the vice governors' future steps.