Creating new perspectives since 2009

Lebanon central bank employees to receive bonuses

September 25, 2020 at 12:36 pm

Lebanese Army soldiers roll away a flaming tire from the fence surrounding the local branch of the Banque du Liban (Lebanese Central Bank) as protesters gather to demonstrate against dire economic conditions in the northern city of Tripoli on 11 June 2020. [FATHI AL-MASRI/AFP via Getty Images]

Employees of Lebanon’s central bank are set to receive four-month bonuses, despite the crisis-ridden country’s economic collapse, local daily Al-Joumhouria reported.

Recipients of the intended bonus include the bank’s Governor Riad Salameh, the newly appointed vice-governors and four members of the Banking Control Commission as well as the rest of the institution’s employees.

The move is surprising considering the country’s dire economic situation, which has pushed more than 50 per cent of the population under the poverty line in recent months.

However, the bonuses allocated to central bank employees could have been blocked by the newly appointed government commissioner of the financial institution, Christelle Wakim, according to the Al-Joumhouria report.

“It was striking that Christelle Wakim, the [newly appointed] government commissioner at Banque du Liban, did not object to this decision, noting that the Monetary and Credit Law grants her this right,” read the daily.

Observers, according to ­Al-Joumhouria, have also questioned the timing of the bonuses, particularly after Salameh warned in late August that the central bank could not use its foreign reserves to finance subsidies on basic goods indefinitely.

READ: Lebanon president calls for end to Israeli violations

At the time, Salameh said the central bank would need to stop supporting government subsidies when foreign currency reserve levels reached $17.5 billion.

Currently, the central bank is believed to be holding approximately $18 billion in foreign currency reserves, down from $20 billion in April this year, when the financial institution started supporting government subsidies on basic goods such as fuel, wheat and medicine.

The scheme, which was launched in response to the currency collapse, was intended to prevent such basic necessities from becoming too expensive for residents.

Lebanon is currently struggling with a multitude of crises, including a debilitating economic and financial collapse, which is the country’s worst since the end of the Civil War in 1990.

Meanwhile, the Mediterranean state is struggling to recover from the 4 August Beirut blast, which left nearly 200 dead, thousands more injured and devastated the capital city, while grappling with a snowballing coronavirus outbreak.

Lebanon is also stuck in political deadlock, triggered when Prime Minister Hassan Diab’s cabinet resigned in the wake of the Beirut blast, despite international pressure for the swift formation of a new government.

READ: France backs proposal by Lebanese ex-PM to end cabinet deadlock