Every time Riad Salameh was asked on the exchange policy of the Peg, his response was that he was doing what successive governments have demanded and asked of him
In truth “currency stability” was @BDL_Lebanon ‘s legal mandate
But What now?
Legal experts may have more to add to this debate but the original framers of @BDL_Lebanon charter never specified what currency stability meant
What is clear, however, is that Mr. Salameh interpreted those words to mean a fixed / pegged exchange rate
Judging by his legal mandate (every Central Bank has one), there is no denying the fact that @BDL_Lebanon & Mr. Salameh met this legal remit admirably. This explains the multiple personal awards & positive country reports from IMF who always referred to #Lebanon as “resilient”
They are in top 10 closest pair of capitals in the world
Modern histories of #Lebanon & #Syria couldn’t have been more different
What made both countries so different?
What does the future hold for each?
While multiple factors played a role into making #Syria & #Lebanon so different, 1860 is arguably the key starting point
The civil war that year led to an international intervention (led by #France ) that would continue to shape Lebanon’s character for decades to come
Ever since up to 12,000 European soldiers landed in Beirut in 1860, #Lebanon became the one place where Ottomans turned a relatively blind eye to Europeans starting missionary schools or opening more consuls. Many families from today’s #Syria were attracted to this Western pivot
Since 2016, #Syria Government gets around 120k barrels of oil from the Kurds in the North. This gets refined. 40k barrels are kept for domestic Govt-controlled areas while the rest gets returned to the the Kurds. This arrangement has been in place since 2016
Given its natural gas field in Shaer & other places, #Syria relied on natural gas rather than fuel to power its power plants. Following takeover of ISIS of those fields, it has become nearly extremely difficult to continue to use natural gas (ISIS destroyed them before leaving)
Salameh put up an hour-long speech defending his record and implicitly reminding the Govt that
#Lebanon ‘s laws stipulate that he can only be removed from office if medically incapacitated or is proven to have committed illegal acts
2- Let’s start first with his comment on financing excessive imports that many assumed it to mean #Syria
Prior to 2010, Syria’s Mazot & other petroleum products were so subsidized that they sold domestically at less than a third of the prices in #Lebanon or #Turkey =>
3-With Stable SYP & heavily subsidized domestic petroleum prices, merchants & smugglers used the huge difference in pricing to move the oil & mazot from #Syria to #Lebanon. This went on for decades and was prime reason for finally reducing the subsidy just before the war started
Mr. Salameh finally responded to the Govt draft plan that had estimated losses of nearly $40 billion at BDL
In a nutshell, Salameh is reminding everyone that BDL is not a commercial bank & therefore he doesn't have to mark his books to market
@BDL_Lebanon is reminding everyone that it has an "independent moral personality" with a specific "duty" to preserve the safety of the currency & to play lender of last resort
In order to do above, it ought to therefore be allowed not to offer full disclosure on sensitive data
@BDL_Lebanon wants us to think of it like the Fed or ECB.
Salameh is saying that he should therefore be allowed to use reserves against any losses and if these reserves are exhausted, BDL could then offset current losses with expected "future profits"
3-Bank restructuring is supposed to start with US$20.8 billion capital write-off of existing shareholders. After wiping out this number, US$62.4 billion of losses will be covered by contribution from "large depositors". Exact parameters of this contribution is yet to be defined
The strike on Turkish soldiers must not come as huge shock since Syrian & Russian armies accelerated military operations in #Idlib area lately
Why are the Turks in Idlib?
Is it to deter Damascus from entering the province & sending more refugees into #Turkey? =>
While it is true that #Tukey has long abandoned its more direct anti-regime policies,
Ankara’s involvement in #Syria had morphed into the issue of protecting their allies
While #Turkey decided it could not be seen to be abandoning the allies it has long supported, Ankara has also come to the hard realization that those allies were difficult to manage and could not administer themselves