, a 95% drop in the currency would be a firing offence for a central-bank governor. Not in, which by late 2021 was two years into a grinding financial crisis. The lira, long pegged at 1,500 to the dollar, had plummeted to 27,500. Najib Mikati, the prime minister, was asked if it was time to replace the longtime head of the Banque du Liban . His answer was clear: “one does not change one’s officers during a war”.
Mr Salameh was appointed in 1993 by Rafik Hariri, Lebanon’s first post-civil war prime minister. Together they built an economy that relied on massive foreign inflows to finance yawning deficits and sustain the currency peg. At its peak, the country’s banking sector held deposits worth four times the country’sThe scheme began to sputter in 2015, as regional instability and the oil-price crash hurt inflows. To lure fresh deposits Mr Salameh started a scheme known as “financial engineering”.
Yet no one dared remove him. Mr Salameh had forged close ties with Lebanon’s political, business and media elites, and with powerful foreign patrons like America and France. He had free rein to issue a madcap series of decrees that financed subsidies, imposed capital controls and sought to manage the exchange rate. They hurt depositors, and the country’s foreign reserves have dropped from $31bn in 2018 to $10bn even as the currency collapsed.