Lebanon’s central bank sees no risk to pound, hopes Saudi ties improve

A general view of the Bay of Jounieh with houses and roads, from Harissa mountain, north of Beirut, Lebanon, February 15, 2016. (Reuters)

Lebanon’s central bank governor said on Friday he saw no risk to the Lebanese pound and it remained bank policy to keep it stable, adding that he had not been informed of any measures by Saudi Arabia targeting the Lebanese financial sector.

A crisis in ties between the governments of Lebanon and Saudi Arabia has fuelled concerns of potential economic ramifications for Lebanon, which has hundreds of thousands of expatriates working in Gulf Arab states.

Riad Salameh told Reuters that media reports about the size of Saudi deposits at the central bank were inflated, and that neither Saudi Arabia nor other Gulf Arab states had been in touch about deposits.

“I think the market has been misinformed, figures have been largely inflated. By law I cannot disclose figures because I don’t have the right to do it, but I can tell you that what is circulating is inflated figures,” Salameh said.

“Besides all these stories circulating that are not substantiated by Saudi official positions - we disregard them at the central bank - I have not been informed officially, of any measure - coming or happening - concerning the financial sector,” Salameh said.

He said he hoped the government would get “its act together to reestablish good relations with Saudi Arabia, as Lebanon has always been an economic partner with the kingdom”.

Last week Saudi Arabia cancelled a $3 billion aid package to the Lebanese army over the Beirut government’s failure to sign up to statements condemning attacks on Saudi diplomatic missions in Iran. The Lebanese national unity government includes the Iran-backed Shi’ite group Hezbollah.

“There is no risk on the Lebanese pound,” Salameh said. The central bank and Lebanese commercial banks had “the means ... to secure the stability of the Lebanese pound”, he said. He said Saudi statements were “not aggressive to the Lebanese people”.

Last Update: Wednesday, 20 May 2020 KSA 09:50 - GMT 06:50