BDL governor calls on international community for urgent support

BEIRUT — Banque du Liban (BDL) Governor Karim Souhaid called on the international community to support Lebanon’s economic recovery in an opinion piece published Sunday in the Financial Times, saying domestic reforms alone would not be enough.

In a rare media intervention since taking the helm of the central bank in March 2025, Souhaid wrote that recent government policy adjustments were moving the country “in the right direction,” with fiscal balances improving “largely through higher tax collection and constrained spending,” but that those would not be “enough to resolve all impediments towards recovery.”

“The central bank’s priorities — preserving our currency, maintaining basic state functions, and providing phased repayments to depositors — are appropriate. But they operate within tight constraints,” Souhaid said. “Without external support, adjustment will proceed, but more slowly and at greater social cost.”

Souhaid, who has been widely viewed as close to the banking lobby since his appointment, said Lebanon’s economic crisis was “often described as complex,” though “it is not.”

“[It is] the predictable result of fiscal indiscipline by dilettante governments, monetary mismanagement by the central bank, and the concentrated misallocation of private savings by the banking sector,” he wrote.

“A banking system cannot be rebuilt on impaired assets and inadequate capital,” he added. “It must be recapitalized with fresh equity or seriously downsized to reflect economic reality. Anything in between merely prolongs stagnation.”

Souhaid also cited armed conflict as a major obstacle to recovery. “War brings uncertainty that deters investment, accelerates capital flight, and erodes gains from policy reforms. Under such conditions, even sound economic measures yield diminished returns.”

The governor said that while international actors had provided extensive advice, and Lebanon’s allies and neighbors had expressed “support in principle,” financial support had remained limited.

He attributed this to a “familiar hesitation” among donors to wait for policy corrections before committing capital, arguing that stabilization requires both tracks to advance together. “Without a bridge, even well-designed reforms risk exhaustion before they take hold,” he said.