Lebanon’s Central Bank governor will be replaced

Significance

Salameh, along with his brother Raja, is under investigation in Lebanon and Europe for alleged financial irregularities following Lebanon’s 2019 economic collapse. The economy contracted in 2021 for a third consecutive year, inflation is above 200% year-on-year, the currency has fallen in value by over 90% since 2019 and the financial sector is practically bankrupt.

Impacts

• Revelations in a court case against Riad Salameh could result in widespread protests calling for the overthrow of the political elite.
• A protracted process of government formation would temporarily protect Salameh from prosecution.
• If the IMF’s conditions are not fully met, it may provide a lower level of support than the promised USD3bn.