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Most bewildering in #Lebanon commentary is how criticism of @BDL_Lebanon & Riad Salameh’s policies have been interpreted as political in nature
For nearly a year now this pattern has been in place
Salameh’s recent interview was very important in that regard
Here is why
For nearly a year now this pattern has been in place
Salameh’s recent interview was very important in that regard
Here is why
2-To be sure, Salameh’s comments were confusing and disjointed. The interviewer did a poor job at keeping the discussion focused. It was also in poor taste to imply that he is criminal right from the start. Salameh handled well
Now to more important matters
Now to more important matters
3-Large segment of commentators have long argued that US$ deposits were spent funding Govt expenditures
Salameh countered this suggestion by explaining how the Govt finances itself through LBP which BDL prints
He made it clear that $ deposits were not used to finance the Govt
Salameh countered this suggestion by explaining how the Govt finances itself through LBP which BDL prints
He made it clear that $ deposits were not used to finance the Govt
4-Same segment of commentators who long argued $ deposits financed Govt expenditures had earlier latched on Governor’s previous comments with respect to “neighboring country” sucking US$ from #Lebanon
At the time, many thought he was referring to #Syria
Now, he said this
At the time, many thought he was referring to #Syria
Now, he said this
5-Instead of making a veiled reference to #Syria as he did in the past, this time he was more specific
He referred to the 1.5 million Syrian “Refugees” based on #Lebanon and how they added to total imports & hence need for $
Note how he offered no specific data
Moreover
He referred to the 1.5 million Syrian “Refugees” based on #Lebanon and how they added to total imports & hence need for $
Note how he offered no specific data
Moreover
6-While there is no doubt having 1.5 million Syrian refugees can add to total imports, one must put this in perspective
Most of the refugees are not exactly buying Range Rovers or having Kellogg cereals for breakfast
Again, it would be more useful to supply the specific data
Most of the refugees are not exactly buying Range Rovers or having Kellogg cereals for breakfast
Again, it would be more useful to supply the specific data
7-Same segment of commentators who feel that criticizing Salameh is politically motivated by pro-Hezbollah groups (Bizarre) are quick to to support the banks and their role in the crisis
Even here, one ought to have listened carefully to what Salameh said
Even here, one ought to have listened carefully to what Salameh said
8-On charge that bank money was taken by @BDL_Lebanon , Salameh explained how between 2017 & 2019, financial engineering ended up putting $11.3 billion inside the banking system
He was boasting how much the central bank helped the banks rather than take money from them
BUT
He was boasting how much the central bank helped the banks rather than take money from them
BUT
9-What Salameh totally avoided of course was discussing the cost of keeping the peg
Sadly, the interviewer @_HadleyGamble totally missed focusing on what is arguably the most critical subject - The Peg
Salameh did hint to this but never explicitly
Here is what he said
Sadly, the interviewer @_HadleyGamble totally missed focusing on what is arguably the most critical subject - The Peg
Salameh did hint to this but never explicitly
Here is what he said
10-The money Salameh said went to finance imports
In a classic chicken and egg argument, Salameh never entertained the notion that
The peg that kept LBP too strong for 27 years was the very reason why imports have been so high
Moreover
In a classic chicken and egg argument, Salameh never entertained the notion that
The peg that kept LBP too strong for 27 years was the very reason why imports have been so high
Moreover
11-While @BDL_Lebanon may have put in bank pockets $11.3 billion from financial engineering trickery, fact is that the central bank has borrowed over $ 100 billion from banks ($ borrowing is estimated to be nearly 75-80 billion of that)
Sadly, @_HadleyGamble Missed this chart
Sadly, @_HadleyGamble Missed this chart
12-When Salameh was accused of taking money from banks, he pointed out how they are private enterprises with independent credit committees making decisions
This is perhaps his most important reminder to the public
The banks made the unilateral decision to lend to Bdl / Govt
This is perhaps his most important reminder to the public
The banks made the unilateral decision to lend to Bdl / Govt
13-Realizing his implicit criticism of bank credit committees, Salameh quickly made mention how it was the banks suffered because the Govt defaulted
Salameh never explained if the Govt even had the luxury to wait before it defaulted given the dwindling $ reserves
Salameh never explained if the Govt even had the luxury to wait before it defaulted given the dwindling $ reserves
14-The horrible port blast/fire has shifted attention from banking & finance
#Lebanon ‘s financial system has been shaken to the core
Sadly, & thanks to politics, public is yet to understand, agree, unite or come to terms with what happened & how to chart a new path forward
#Lebanon ‘s financial system has been shaken to the core
Sadly, & thanks to politics, public is yet to understand, agree, unite or come to terms with what happened & how to chart a new path forward
