BEIRUT, Dec 1 (Reuters) - Lebanon's central bank can keep
basic subsidies for only two more months and the state should
come up with a plan, Governor Riad Salameh said on Tuesday as
the country's financial crisis spirals.
He told Saudi's al-Hadath TV the central bank would commit
to providing Lebanese government accounts for a forensic audit,
but that disclosing those of domestic banks would require a
change in legislation.
A meltdown without precedent has crashed Lebanon's currency,
paralyzed banks and sent inflation soaring.
As dollar inflows dried up, the central bank has used
dwindling reserves to provide foreign currency for key imports -
fuel, wheat and medicine - and some basic goods.
Suggestions of a looming end to subsidies have triggered
panic buying and fears of rising hunger. The crisis had made
over half the population poor.
"We have the capacity to keep the subsidies for two months,"
Salameh said on Tuesday.
"This question should also be asked of those in charge of
the country," he said about the subsidies. He added that
lawmakers would meet this week to start drafting a plan.
Foreign donors have demanded a forensic audit of the central
bank among key reforms before helping Lebanon out of the crisis,
rooted in decades of waste and graft.
But restructuring consultancy Alvarez & Marsal said it
withdrew from the audit because it had not received information
required. Some Lebanese officials have accused Salameh of using
bank secrecy laws to justify withholding information.
Salameh said he was for an audit but local banks' accounts
could not be revealed without some laws being amended.
The central bank would seek to reorganize and sell Lebanese
banks that fail to raise capital, he said. He has said those
that cannot increase their capital by 20% by the end of February
2021 will have to leave the market.
In response to a question about the possibility of U.S.
sanctions, Salameh said the bank was doing everything necessary
within the law and "in constant coordination with the U.S.
Treasury."
Washington has in recent months sanctioned Lebanese
officials on charges of corruption or enabling Iran-backed
Hezbollah.
(Reporting by Ellen Francis and Laila Bassam in Beirut
Editing by Leslie Adler and Matthew Lewis)