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Lebanon central bank governor charged with breach of trust

Central bank chief Riad Salameh has led the entity since 1993. His role came under scrutiny after Lebanon’s financial system collapsed in an unprecedented crisis in 2019.

Reuters

Lebanon's Central Bank Governor Riad Salameh speaks during a news conference at Central Bank in Beirut, Lebanon, November 11, 2019.

Lebanese Central Bank Governor Riad Salameh has been charged with dereliction of duty and breach of trust, according to the state news agency.

Judge Ghada Aoun also brought charges against a money exchange company for breaching an administrative regulation, the agency said.

It did not provide further details. Salameh was not immediately available for comment.

"Mount Lebanon general prosecutor Ghada Aoun has referred to judicial investigation central bank chief Riad Salameh and head of the central bank's Banking Control Commission, Mayya Dabbagh, on charges of professional negligence and breach of public trust," a judicial source told AFP.

Salameh has headed Lebanon's central bank since 1993. Aoun had been investigating his management of dollars that were allocated for subsidising basic goods.

His role came under scrutiny after Lebanon's financial system collapsed in 2019, prompting a crash in the Lebanese pound and a sovereign default.

'Dollars did not all end up in the right place'

The decision came after Aoun found cracks in a central bank scheme meant to sell dollars to food producers and importers at a subsidised rate to curb inflation, the source said.

"The dollars did not all end up in the right place," with some reaching money exchangers who then profited by selling them on the black market, the source added.

The Lebanese pound had been pegged to the dollar at 1,500 since 1997 but the country's worst economic crisis in decades has seen its value plunge by more than two-thirds on the black market.

The dizzying devaluation has led to soaring food prices in a country where more than half of the population lives below the poverty line.

In May, authorities said the central bank would provide dollars to support the import of basic foods and related raw materials.

Aoun last month questioned Salameh, his aides and several money exchangers to determine whether the subsidised dollars reached their target.

"The sum of money that went into the pockets of money exchangers and financial institutions exceeds five million dollars," the judicial source said.

Michel Mekattaf, a top foreign currency exporter and Abed al Rahman al Fayyed, a money exchanger, have also been referred to investigation over the same case.