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Viewing cable 06BEIRUT2412, TFLE01: CENTRAL BANK REQUESTS USG ASSISTANCE IN

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Reference ID Created Released Classification Origin
06BEIRUT2412 2006-07-18 16:20 2011-03-15 18:00 CONFIDENTIAL Embassy Beirut
Appears in these articles:
not
yet
set
VZCZCXRO2310
OO RUEHAG RUEHBC RUEHDE RUEHKUK
DE RUEHLB #2412 1991620
ZNY CCCCC ZZH
O 181620Z JUL 06
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4686
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHROV/AMEMBASSY VATICAN 0645
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RHEHNSC/NSC WASHDC
C O N F I D E N T I A L BEIRUT 002412

SIPDIS

SIPDIS

NSC FOR ABRAMS/DORAN/SINGH/HARDING
LONDON FOR TSOU

E.O. 12958: DECL: 07/17/2016
TAGS: PREL MOPS EFIN ASEC LE IS
SUBJECT: TFLE01: CENTRAL BANK REQUESTS USG ASSISTANCE IN
TRANSPORTING CURRENCY

Classified By: Ambassador Jeffrey D. Feltman for reasons 1.4 (b) and (d
).

1. (U) This message contains an action message for the
Department -- see para 6.

2. (C) Finance Minister Jihad Azour alerted us this morning
to a forthcoming request from the Lebanese Central Bank for
assistance in transporting cash in US dollars from Cyprus to
Beirut. The Central Bank planned to consign this cash
shipment to a private Lebanese currency trader in Cyprus.
However, it would need Israeli permission for the consignees
and their shipment to cross the ongoing blockade of the
Lebanese coast. Azour asked for USG assistance in securing
permission from the Israeli government.

3. (C) In a subsequent telephone conversation, Central Bank
Governor Riad Salame confirmed this request and said that the
amount of cash to be shipped would be in the range of USD
20-30 million. It could be made available for shipment from
Cyprus within 24 to 48 hours of a green light from the
Israeli government, Salame said.

4. (C) Governor Salame told the Ambassador that this
shipment would ease a serious shortage of cash in the
Lebanese economy -- which is over 70 percent dollarized.
This shortage was being wrongly interpreted as a sign of
impending financial crisis, and threatening to lead to even
greater panic among the general public as a result. Salame
strongly urged the Ambassador to secure USG assistance in
allowing the shipment to go through.

5. (C) Minister Azour asked us to consider having USG
personnel, rather than Lebanese consignees, handle the cash
from Cyprus to Beirut. That way, there would be less reason
for the Israelis to object, as the Israelis could be more
certain that nothing but cash was aboard. Also, the Lebanese
consignees would not risk being accused by the Israelis of
having abused their permission to cross the blockade.

6. (C) Comment and action request: Were USG personnel to
handle the cash shipment, they could carry it in a helicopter
from Cyprus via the Beirut airbridge, which has been
operational since July 15. Post requests that the Department
work with Embassy Tel Aviv to secure Israeli permission for
the cash shipment, and that it make the Beirut airbridge
available for this purpose. We know from our economic and
financial contacts that, indeed, there are pending signs of
panic, as depositers are unable to get currency for
transactions (which, in Lebanon, are largely dollar-based).
As part of our strategy to help make sure that the Siniora
government is not fatally weakened by the Israeli attacks, we
hope that we can persuade the Israelis to help us prevent a
financial panic that will inevitably cast a deep political
shadow over Siniora and his cabinet. End comment and action
request.
FELTMAN