Wassim Mansouri appointed acting head of Lebanese central bank

Wassim Mansouri has announced he is taking on the role of interim head of Lebanon's central bank after Riad Salameh's 30-year tenure came to an end on July 31.

He made the announcement during a press conference on Monday, where he laid out a financial roadmap.

Mr Mansouri, 51, was the first deputy governor of Banque du Liban (BDL).

According to Lebanese law, if no successor to the governor is named by the end of the incumbent's term, the first deputy governor must take over.

No successor was named because of a controversy about whether a caretaker cabinet can legally make such an appointment.

Lebanon has been grappling with a deep financial crisis since 2019, resulting from decades of corruption and mismanagement.

The local currency has lost more than 97 per cent of its value, pushing more than 80 per cent of the population into poverty.

The ruling elite's inability to implement the sweeping reforms demanded by the International Monetary Fund has left negotiations around an aid package from the organisation in limbo, further worsening the economic situation.

Mr Mansouri stressed that the central bank “must completely stop financing the government outside of a legal framework”.

The Lebanese state has long been heavily reliant on the central bank to fund its expenditure.

“We must move to another policy, which is to stop financing the state completely, and no disbursement of government funding will ever be signed outside my convictions and outside the legal framework”, Mr Mansouri added.

Mr Mansouri also called for the “liberalisation and unification” of the exchange rate between the Lebanese pound and the dollar.

“The exchange rate must be unified and floating without requiring BDL intervention. This process should take place gradually, in agreement with the government”, he added.

He also called for sweeping reforms to be implemented, including a budget for 2023, a law on capital controls and the restructuring of the banking sector.

“There will be no monetary recovery without these laws”, he said.

“To the Lebanese people … what I can promise you is increased transparency. We extend our hand to everyone to reach a solution as quickly as possible.

“To politicians, I ask that you no longer link monetary matters to political manoeuvring.”

Previous resignation threats

The four deputy governors – Mr Mansouri, Bachir Yakzan, Salim Chahine and Alexandre Moradian – had threatened to resign if a successor was not appointed.

Mr Mansouri told Reuters this month that taking the role was similar to inheriting a “ball of fire”.

Local reports indicated on Friday that Mr Mansouri had accepted the position after winning certain guarantees from the ruling elite.

They include a law passed by parliament authorising him to withdraw $200 million a month for three months from the mandatory reserves of the BDL.

Mr Mansouri was nominated as first vice governor by Speaker of Parliament Nabih Berri, his distant cousin and the leader of the Shiite Amal Movement, an ally of Hezbollah.

He will become the first Shiite to hold the position of BDL's interim head. The position of governor has long been held by a member of the Christian Maronite community.

Mr Mansouri holds a PhD in public law, specialising in constitutional law. He has previously served as the director of the law faculty at the Lebanese University and holds a teaching post there.

For more than seven years, he was also a close adviser to Youssef Khalil, who held the position of finance minister in Tammam Salam's government from 2014 to 2016 and later resumed the role under Saad Hariri until January 2020.

Mr Salameh, 72, was the world's longest-serving central bank governor.

Recent accusations of embezzlement of Lebanese public funds, both domestically and internationally, have turned the spotlight on Mr Salameh's 30-year tenure.

He is also largely blamed for the financial crisis that ultimately led to the collapse of Lebanon’s economy.

He has repeatedly denied these allegations, saying he is being “scapegoated for the crisis”.