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Mon 18 May 2020 06:10 PM

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Lebanese central bank official charged with manipulating exchange rate

Director of monetary operations at the central bank, Mazen Hamdane, was arrested on Thursday

Lebanese central bank official charged with manipulating exchange rate

Lebanon is in the midst of its worst economic crunch since the 1975-1990 civil war. 

A Lebanese prosecutor on Monday charged a top central bank official with manipulating the exchange rate, a judicial source said, as the country struggles with a major currency crisis.

The director of monetary operations at the central bank, Mazen Hamdane, was arrested on Thursday, as part of a currency crisis probe that has seen dozens of money changers detained in recent weeks.

The Lebanese pound had been pegged to the dollar at 1,507 since 1997 but the country's worst economic crisis in decades has seen its value plunge by more than half on the black market.

The central bank has sought to stem the fall by ordering exchange offices to cap the rate at 3,200 to the dollar, but the pound has continued to tumble.

Financial prosecutor Ali Ibrahim "charged Hamdane with manipulating the national currency and breaching the pound's stability through directly buying dollars from money changers", a judicial source told AFP.

The prosecutor has referred his case to an investigative judge, the source said.

These are "the first charges against a central bank official", it said.

On Friday, the central bank issued a statement denying it was behind "any manipulation in the money changing market".

Lebanon is in the midst of its worst economic crunch since the 1975-1990 civil war. 

As part of a severe liquidity crisis, banks have since last autumn imposed crippling capital controls, limiting then stopping dollar withdrawals and halting transfers abroad. 

Security forces have detained around 50 money changers accused of selling dollars at too high a rate in recent days, though some have been released.

The head of the money changer syndicate has also been arrested. 

In late April, Lebanon's government approved a rescue plan aimed at redressing the country's crumbling economy.

The deeply indebted Mediterranean country last week started negotiations with the International Monetary Fund towards obtaining billions of dollars in financial aid.

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