The need for stability: Evaluating options for Lebanon's Central Bank governance

On the economic front, all eyes are still focused on Lebanon's Central Bank, whose governor's term is ending in a few weeks.  

This article was originally published in, translated from the Lebanese newspaper Addiyar. 

Markets are concerned about the ability of Deputy Governor Wassim Mansouri to handle the heavy tasks that will be assigned to him, especially considering that he comes from a legal background rather than a monetary one, which hampers the effectiveness of the measures he will take.  

Additionally, the emerging political complications arising from the current political divide will greatly complicate his work in the upcoming phase. 

Banking sources told Addiyar that an inappropriate decision may be taken at the level of governance, which will have an immediate impact on the markets, particularly on the value of the Lebanese lira.  

Therefore, it is difficult to weigh measures between government financing and maintaining monetary stability at the same time.
 
The sources add that Riad Salameh, with his extensive experience at the Central Bank, has been able to find a mechanism and is, therefore, the most suitable person for this sensitive phase. 

These concerns have reached decision-making centers in Lebanon, and some have been convinced of them. Thus, the extension of Riad Salameh's tenure for a period not exceeding the presidential election has been proposed, with his duties being to maintain monetary stability while financing the government.  

If this proposal takes its course behind the scenes of decision-making, given the national interest, legal circles see that the difficulty lies in the legal "production," especially since there are objections from fundamental political forces within the government.  

This has led to another proposal being discussed behind the scenes, which is the possibility of keeping Salameh as a senior advisor to the deputy governor when he assumes his duties by proxy or performs the role of the shadow governor, given the utmost need for his services at this critical moment in time.