Lebanon central bank official probed over currency crash

BEIRUT (AP) — Lebanon's financial prosecutor questioned a top central bank manager on Friday over the country's financial crisis, including the free fall of the Lebanese currency, a judicial official said.

Mazen Hamdan, the head of cash operations at the bank, is the most senior official to be interrogated in an ongoing probe into possible financial wrongdoing. He was ordered to appear for questioning about what Lebanon's official news agency called “the manipulation of the dollar exchange rate.”

The central bank denied charges of manipulation in a statement that detailed recent transactions with money traders.

The probe reflected a growing clash between the central bank and the government at a critical time, as Lebanon launches talks with the International Monetary Fund to negotiate a rescue plan amid an unprecedented economic and financial crisis. The talks come against the backdrop of a deepening liquidity crunch, negative economic growth, soaring inflation and a massive state debt.

The judicial official, who spoke on condition of anonymity because he was not authorized to discuss the investigation, said Hamdan has not yet been formally charged.

In a statement, the central bank said it was lifting banking secrecy rules to show transactions between the bank and private money traders, to respond to the prosecutor's allegations. It said the transactions with private traders over one month were of a limited quantity and were no match to the fluctuations witnessed in the market. It added that no transactions with exchange bureaus occurred after May 5.

“There are no manipulations in the exchange market as a result of transactions with the central bank,” it said.

Meanwhile, the central bank's staff union called for the release of Hamdan, denouncing a...