Middle East: Keeping Lebanon central bank's Salamé was the right call
After months of uncertainty, the Lebanese government has finally approved Riad Salamé’s renewal at the head of the country’s central bank. It was right to reappoint him; now he should be left to work unfettered by political interests.
When asked by Euromoney mid-May if he would be staying on as governor, Riad Salamé summed up his state of mind with the words: “I’m working.” By that he meant he was focused on the task at hand and did not want to lose himself in speculation over whether or not his term, due to end on July 31, would be renewed.
In Lebanon’s banking community, many hoped he would keep on working and be offered a further mandate. But for months, until May 24 when it was finally announced, his reappointment had been very much in doubt.
There are legitimate reasons to question Salamé’s actions. A central bank governor should always be held to account – doubly so one who has been in office as long as he has. His first appointment dates back to 1993.
But the reasons offered by those wishing to replace him were weak. The backlash against the governor picked up after last summer, when the central bank invited Lebanon’s banks to deposit dollars in its coffers, in exchange of which the banks were given the ability to discount at 0% the equivalent amount in treasury bills denominated in Lebanese pounds.