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BEIRUT — Once lauded for reviving Lebanon's economy, former central bank chief Riad Salameh, wanted abroad and reviled at home after years of financial meltdown, was arrested on Tuesday by Lebanese authorities.

The 74-year-old French-Lebanese national is widely viewed as a key culprit in the country's dramatic economic crash, which the World Bank has called one of the worst in recent history.

Salameh left office at the end of July 2023 without a successor and faces numerous accusations including embezzlement, money laundering and tax evasion in separate probes in Lebanon and abroad.

He has repeatedly denied wrongdoing and defended his legacy, saying he is a "scapegoat" for Lebanon's economic collapse.

Rarely seen in public since leaving office, he was arrested on Tuesday after being questioned by the public prosecutor over the alleged embezzlement of some $40 million in central bank funds, a judicial official told AFP.

Germany, along with France, issued an arrest warrant for Salameh in May 2023 over accusations including money laundering and fraud.

In June this year, a Munich court cancelled the German warrant, saying Salameh could no longer use his post to suppress evidence but "confirmed the urgent suspicion with regard to the accusations" against him.

Salameh has not appeared before the French judiciary, but his brother Raja was placed under official investigation last month in France as part of probes there over alleged illicit enrichment.

Revived the economy

In August last year, the United States Treasury announced coordinated sanctions with Canada and Britain against Salameh.

His "corrupt and unlawful actions have contributed to the breakdown of the rule of law in Lebanon", the US Treasury Department said in a statement.

"Salameh abused his position of power, likely in violation of Lebanese law, to enrich himself and his associates by funnelling hundreds of millions of dollars through layered shell companies to invest in European real estate," it said.

In March 2022, France, Germany and Luxembourg seized assets worth $130 million in a move linked to a French probe into Salameh's personal wealth.

In 2023, Lebanon charged him with embezzlement, money laundering and tax evasion.

The domestic probe was opened following a request for assistance from Switzerland's public prosecutor, who was investigating more than $300 million in fund movements by Salameh and his brother.

Before his judicial troubles, Salameh was largely viewed as the architect of the financial policy that allowed Lebanon to recover from a grinding 1975-1990 civil war, and was responsible for pegging the Lebanese pound at 1,507 to the dollar.

Known for his calm demeanour, he studied economics at the American University of Beirut and worked for Merrill Lynch in the Lebanese capital before becoming its vice-president in France.

In 1993, Salameh was nominated as central bank governor by then prime minister Rafic Hariri, a wealthy real estate developer whose portfolio Salameh handled at Merrill Lynch.

Salameh received accolades, and was named the world's best central bank governor by Euromoney in 2006 and by The Banker magazine in 2009.

Warning signs

"He's the man who knew how to revive the economy and gain the confidence of investors," said economist Nicolas Chikhani.

But after war broke out in neighbouring Syria in 2011, "warning signs started to grow" for the Lebanese economy, Chikhani said.

Successive governments failed to take action to restructure the economy, and public debt piled up.

From 2016, Salameh launched so-called financial engineering aimed at increasing central bank reserves, providing capital to banks and maintaining the value of the pound, in measures that some have compared to a Ponzi scheme.

In late 2019, he became the main focus of public anger as the economy began to unravel, and in 2020 Lebanon defaulted on its debt for the first time.

Commercial banks imposed draconian withdrawal restrictions when the economy collapsed, preventing depositors from accessing their life savings.

Salameh "never refused the political class anything", and "protected the banks whose main shareholders are politicians" because he once had presidential aspirations, one veteran banker told AFP on condition of anonymity because of the sensitivity of this topic.

In the days leading to his retirement, Salameh told local media the political class abandoned him "a long time ago".

FRANKFURT, Germany — German automotive giant Volkswagen said on Monday it could close production sites in Germany, as the auto industry struggles to manage rising costs.

"In the current situation, even plant closures at vehicle production and component sites can no longer be ruled out," Volkswagen said in an internal memo sent to employees and seen by AFP.

Europe's largest auto manufacturer remained committed to Germany as a "business location" but "headwinds have become significantly stronger", VW brand CEO Thomas Schaefer was quoted in the document as saying.

The challenging conditions meant "we must now step up our efforts" to secure the long-term success of the company, Schaefer said in the note sent to employees.

"We want to remain the leading volume manufacturer worldwide, and do so on our own strength," Schaefer said.

Volkswagen last year announced plans for a 10-billion-euro ($11-billion) savings programme and has flagged cuts to its workforce over the coming years to improve profitability.

But the group said further measures were now required after disappointing results published in August that showed a dip in profits.

Rising costs and cooling demand in China also meant the group had to lower its profit margin forecasts for the rest of the year.

The core of the Volkswagen group "now faces particularly significant challenges", the memo said.

Despite the cost-saving measures already announced, "the current developments in the automotive market and the German economy demand further action", it said.

The company's board had determined that "the brands within Volkswagen AG must undergo comprehensive restructuring".

"The goal must be to optimise product costs, material costs, and sales performance, as well as factory and labour costs," the memo said, evoking possible plant closures.

"Simple cost-cutting measures" were no longer enough, while the group said it was open to further job cuts, according to the memo.

FRANKFURT, Germany — Eurozone interest rate setters should proceed "gradually and cautiously" in loosening monetary policy as there are still challenges in tackling inflation despite recent progress, an ECB board member cautioned recently.

After the European Central Bank's historic campaign of interest rate hikes, eurozone inflation has been slowly coming down to the central bank's two-per cent target.

Data this week showed inflation dropping to 1.9 per cent in both Germany and France in August— the first time it has fallen below two per cent in both countries since 2021 — boosting expectations the ECB might cut rates again in September.

ECB board member Isabel Schnabel welcomed signs that consumer prices were cooling but cautioned that headline inflation "understates the challenges monetary policy is still facing".

In a speech in the Estonian capital Tallinn, she pointed in particular to "persistent price pressures in the services sector".

"Policy should proceed gradually and cautiously," she said.

"The pace of policy easing cannot be mechanical. It needs to rest on data and analysis."

The central bank for the 20 nations that use the euro currently expects inflation to fall back to the two-per cent target at the end of 2025, she said.

Surging energy prices after Russia's invasion of Ukraine sent eurozone inflation soaring past 10 per cent in late 2022, prompting the ECB to launch its tightening cycle.

The first cut after the hiking cycle came in June. The bank held off from a second cut in July but expectations are growing for a cut next month.

Full eurozone inflation figures for August are due later Friday.

TUNIS — Libya's central bank governor Seddik Al Kabir said he fled the country following "threats" from armed groups, amid tensions between rival administrations over the bank's management, The Financial Times reported recently.

"The head of the Libyan central bank who controls billions of dollars in oil revenue said he and other senior bank staff had been forced to flee the country to 'protect our lives' from potential attacks by armed militia," the British newspaper reported.

In a phone interview with the newspaper Kabir, whose location was not specified, said militias have been "threatening and terrifying bank staff" in attempts to push him out of office.

Tensions have been rising since early August when a group of men — some of whom were armed — laid siege to the bank demanding the removal of Kabir.

On August 18, the bank announced it was suspending all operations following the abduction of its information technology chief. He was eventually released.

Days later an eastern-based administration in divided Libya said that an "outlaw group" close to UN-recognised government based in Tripoli had forcibly taken over the central bank.

As a result the administration based in the eastern city of Benghazi said it was suspending operations across oil fields and terminals in areas under its jurisdiction.

The locations affected constitute around 90 per cent of the country's oil fields and terminals.

The oil blockade has led daily production volumes to dwindle to around 600,000 barrels per day, almost by half, Libya's Thursday by the National Oil Company said on Thursday.

Kabir has faced criticism from people close to Dbeibah over the central bank's management of oil resources and the state budget.

Libya is struggling to recover from years of conflict after the 2011 NATO-backed uprising that overthrew longtime dictator Moamer Kadhafi.

It remains divided between the UN-recognised government in the capital Tripoli led by Prime Minister Abdulhamid Dbeibah, and the rival administration in the east backed by military strongman Khalifa Haftar.

Kabir told The Financial Times that a commission set up by the authorities in Tripoli had seized control over the bank, and he blamed Dbeibah for this "illegal" action.

On Thursday, the bank, now under Tripoli-appointee interim governor Abdel Fattah Ghaffar, said its "main network has returned to work normally".

It said operations had "stopped as a result bank's previous management had blocked and disrupted banking systems".

Earlier this week, Ghaffar said the interim management "reassured the International Monetary Fund and the World Bank of our commitment to respect national and international legislation".

On Friday the European Union called for a "negotiated solution" and the resumption of oil production, echoing similar calls by the United States and the United Nations.

PARIS — Asian stock markets wavered but Europe advanced on Thursday, with Frankfurt hitting a new record, as investors digested earnings results by US chip titan Nvidia.

Investors had been keenly awaiting the release from Nvidia, which has become a bellwether for the tech sector owing to its huge role in the development of AI chips.

The firm, whose market capitalisation now exceeds $3 trillion, has accounted for a third of the broad-based S&P 500 index's gains this year.

The company reported after US markets closed on Wednesday that its sales more than doubled to $30 billion in the second quarter, but at a slower pace than in previous quarters.

Its profits also doubled, to $16.5 billion, but Nvidia's shares slipped in after-hours trading as traders had hoped for even better results from one of the world's most valuable companies.

"The AI juggernaut delivered some stellar figures, but let's be real - it didn't exactly knock socks off," said independent analyst Stephen Innes.

"Investors have become spoiled, expecting Nvidia not just to meet but obliterate expectations," he said.

Nvidia shares fell by as much as eight percent in after-hours trading, but they pared back losses and were down around 3 per cent ahead of Wall Street's opening bell on Thursday.

Asian equities were divided, with Tokyo closing flat, Hong Kong rising and Shanghai falling.

In Europe, the Frankfurt DAX reached an intra-day record of 18,912.47 points. It eased a bit but was still up 0.6 per cent at 18,891.77 points around lunchtime.

London gained 0.3 per cent and Paris added 0.7 per cent.

Swissquote Bank analyst Ipek Ozkardeskaya said traders were turning their attention back to interest rates and slowing inflation.

"It means that investors give more importance to the rate cut story than to Nvidia earnings," she told AFP, noting that Wall Street stock futures were up ahead of the opening bell.

US Federal Reserve chief Jerome Powell gave markets a boost last week when he declared that the central bank was ready to finally cut borrowing costs, which sit at a 23-year high.

Investors will pore over a raft of data in the coming days for an idea of how big the rate cut might be when the Fed meets on September 17-18.

A second estimate of US second-quarter economic growth and weekly jobless claims are due later Thursday, followed by the Fed's favoured gauge of inflation on Friday and key jobs data next week.

In Europe, official data showed inflation fell in Spain for the third consecutive month in August and in several major German states.

The European Central Bank, which cut rates in June for the first time since 2019, will also decide next month whether to reduce them again.

In Asia, tech shares were among the worst performers in the wake of Nividia's results, with chipmakers taking a hit.

SK Hynix fell more than five percent in Seoul, where Samsung was also down more than three per cent. The wider Seoul stock market finished in the red.

Taipei-listed TSMC, a key producer of semiconductors, sank more than two per cent and Taiwan's stock exchange fell.

BEIJING — Leading Chinese automaker BYD posted on Wednesday a 24.4 per cent rise in net profit for the first half of 2024, boosted by continuing strong demand for electric cars in its home and overseas markets.

The company posted a net profit of $1.91 billion in the January-June period, up from $1.54 billion in the same period last year, according to results published at the Hong Kong Stock Exchange where BYD is listed.

The firm said sales during the period stood at $42.3 billion, up 15.8 per cent year-on-year.

The Shenzhen-based company , which adopts the English slogan "Build Your Dreams" , is the most prominent EV manufacturer in China, the world's largest automotive market.

Leaders in Beijing are aiming for car sales to be mainly made up of electric and hybrid models by 2035.

In July, such vehicles accounted for more than half of all domestic sales, passing the threshold for the first time, according to the Chinese Association of Automobile Manufacturers.

Generous government subsidies initially helped sales take off, but the policies were phased out in late 2022 and the market now appears to be reaching maturity.

Local EV firms have since been locked in a cut-throat price war as they fight to remain competitive, weighing on their profitability.

BYD has "effectively dealt with challenges brought by intensified industrial competition", it said in the filing. 

Overseas challenges

BYD and other Chinese EV giants have accelerated overseas expansion in recent years, despite concerns in Western countries that local markets will become flooded with imports at prices they view as artificially low.

The European Union has alleged that Beijing's automotive subsidies have given Chinese firms an unfair leg up in foreign markets, distorting competition and harming the competitiveness of European automakers.

Earlier this month, Brussels released a draft plan to impose tariffs of up to 36.3 per cent on Chinese EVs — a measure that will become permanent in October unless a deal is reached with Beijing.

The United States said in May that it would significantly raise customs duties on Chinese EVs to 100 per cent.

Canada also announced a 100 per cent tariff on Monday, accusing China of "not playing by the same rules as other countries" in areas such as environmental and labour standards.

BYD has nonetheless been ramping up globalisation efforts, with plans to open factories in Hungary and Turkey.

Originally specialising in the design and production of batteries, BYD diversified into the automotive industry in 2003.

PARIS — European stock markets mostly rose, Asian equities diverged and oil prices eased on Tuesday as investors focus on the prospect of a long-awaited US interest rate cut and Middle East tensions.

Traders have been more cautious this week after US Federal Reserve Chairman Jerome Powell sent markets soaring on Friday when he signalled that a rate cut was coming as inflation is cooling.

Powell was followed on Monday by the head of the San Francisco Fed, Mary Daly, who said it was "hard to imagine" not cutting next month.

Investors will pore over a clutch of US indicators later this week for clues about the size of the promised rate reduction, which the Fed is expected to deliver at its next meeting on September 17-18.

US second-quarter economic growth figures are due on Thursday, followed by the Fed's preferred gauge of inflation on Friday and jobs data next week.

Traders are also eagerly awaiting the latest earnings results from chip titan Nvidia, which will be released Wednesday and could provide more clues about demand for the hardware powering the AI boom.

While European stocks were mostly higher on Tuesday, "direction could be lacking ahead of Nvidia results later in the week", Jane Foley, head of foreign exchange strategy at Rabobank London, told AFP.

She said the markets are also seeking "more clarity from US economic data about the amount that the Fed may be prepared to ease in September and in the coming months".

London's FTSE 100, which closed for a bank holiday on Monday, and Frankfurt's DAX were up while the Paris CAC 40 was flat.

In Asia, Hong Kong rose despite losses in the tech sector that came after Temu owner PDD posted disappointing revenue figures and warned on the outlook for future growth.

The e-commerce firm's shares, which are listed in New York, tanked a record 28.5 per cent, wiping tens of billions off its market capitalisation.

In Hong Kong, rivals Alibaba and JD.com both sank around four per cent.

Tokyo and Mumbai rose but Shanghai, Seoul, Sydney and Taipei slipped.

Middle East fears 

Investors are also tracking tensions in the Middle East after Sunday's exchange of fire between Iran-backed Lebanese militant group Hizbollah and Israel raised fears of a broader conflict.

Crude prices eased slightly but held most of Monday's gains of at least three per cent, with Brent, the international benchmark, sitting above $80 per barrel.

Traders were also jolted by news that the eastern-based administration in oil-rich Libya will close fields under its control and suspend production and exports "until further notice". 

"A mix of geopolitical tensions, volatile oil prices, and mixed economic data has created a complex and uncertain backdrop for global financial markets," said Luca Santos, currency analyst at ACY Securities.

"While the initial response has been one of caution, the evolving nature of these risks means that market conditions could change quickly," Santos said.