Lebanon Crisis Brings Mixed Legacy for Riad Salameh

FILE PHOTO: Lebanon's Central Bank Governor Riad Salameh reacts after a news conference at Central Bank in Beirut, Lebanon November 11, 2019. REUTERS/Mohamed Azakir
FILE PHOTO: Lebanon's Central Bank Governor Riad Salameh reacts after a news conference at Central Bank in Beirut, Lebanon November 11, 2019. REUTERS/Mohamed Azakir
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Lebanon Crisis Brings Mixed Legacy for Riad Salameh

FILE PHOTO: Lebanon's Central Bank Governor Riad Salameh reacts after a news conference at Central Bank in Beirut, Lebanon November 11, 2019. REUTERS/Mohamed Azakir
FILE PHOTO: Lebanon's Central Bank Governor Riad Salameh reacts after a news conference at Central Bank in Beirut, Lebanon November 11, 2019. REUTERS/Mohamed Azakir

Touted as the guardian of Lebanon’s monetary stability, he steered the tiny country's finances for nearly three decades, through post-war recovery and bouts of unrest.

Now, Lebanon’s central bank governor is being called a “thief” by some anti-government protesters who see him as a member of a corrupt ruling elite whose mismanagement has driven the country to the edge of bankruptcy.

The changing fortunes of Riad Salameh, a 69-year-old former investment banker, mirror the rise and fall of Lebanon’s post-war banking sector, which he personally oversaw, The Associated Presse reported.

Last year, as economic conditions worsened and Lebanon was engulfed in mass protests, banks began imposing limits on cash withdrawals and limits on transfers abroad that continue to deprive depositors of access to their savings. In recent weeks, the Lebanese pound — pegged to the dollar for more than two decades under Salameh — lost 60% of its value against the dollar on the black market.

Protesters rioted, hurling firebombs and smashing ATM machines. Metal barriers rose up around the banks.

“They are like thieves, hiding behind their fortifications,” said Ahmad Rustom, 46, a self-employed carpenter standing outside a local bank in Beirut recently. “The fact that they are fortifying means they don’t intend to give people their money back.”

At the center of this tumult is Salameh, one of the world’s longest-serving governors. Prime Minister Hassan Diab's government has singled him out, blaming the bank's “opaque policies" for the downward currency spiral over the past weeks.

Salameh has declined an AP request for an interview but defended himself publicly against what he described as a “systematic campaign” against the central bank, blaming successive governments for the crisis.

“Yes, the central bank financed the state, but it is not the one that spent the money,” Salameh charged in a televised speech.

In perhaps the starkest warning to Salameh, the head of cash operations at the central bank was charged earlier this month with violating banking laws and money laundering, allegations the central bank denied. The official, Mazen Hamdan, was later ordered released on bail.

Salameh’s supporters say he did his best to keep the economy afloat and is being made a scapegoat.

David Schenker, the US assistant secretary of state for Near Eastern affairs, has weighed in, saying Salameh has credibility and that Washington has “worked well” with him.

Nassib Ghobril, chief economist at Lebanon's Byblos Bank, the country's third-largest lender, said Salameh "used the tools at hand to maintain the currency stability for so long, despite the fact that only the monetary policy was functioning” in the country.

Salameh is credited with preserving financial stability at critical junctures.
In 2009, he became the first Arab central bank governor to ring the bell at the New York Stock Exchange.

“I hope that through my work I have benefited Lebanon and its banking sector but for sure this is not an individual effort but that of a team at the central bank,” he once said in an interview.

Successive governments, however, did little to enact reforms or improve Lebanon’s infrastructure, while continuing to borrow heavily, accumulating one of the world’s largest debts reaching $90 billion, or 170% of GDP.

With Lebanon in constant need of hard currency to cover its massive trade balance deficit — it exports way too little and imports almost everything —Salameh helped attract deposits to local banks by offering higher interest rates than those of international markets.

When the flow of hard currency dropped, beginning in 2016 — in large part because falling oil prices reduced remittances from Lebanese working in Gulf Arab nations — Salameh responded with a so-called “financial engineerings” debt policy. This encouraged local banks to obtain dollars from abroad by paying high interest rates, to keep the state's finances afloat.

This approach is what his detractors now say proved too costly for the country. An economic recovery plan recently adopted by the government showed that the central bank had $44 billion in losses over the past years, the result of losing financial operations.

In the months before anti-government demonstrations erupted last October, panicked depositors pulled billions of dollars from banks, which subsequently closed for two weeks and later imposed stringent restrictions on withdrawals.

Protesters now shout insults at Salameh outside the central bank, surrounded with concrete walls and barbed wire on Beirut’s Hamra Street.



Gaza Aid System Under Pressure as Thousands Seek Food

Palestinians walk next to a donkey-drawn cart loaded with aid supplies which they received from the US-backed Gaza Humanitarian Foundation, near an area of Gaza known as the Netzarim corridor, May 29, 2025. REUTERS/Ramadan Abed
Palestinians walk next to a donkey-drawn cart loaded with aid supplies which they received from the US-backed Gaza Humanitarian Foundation, near an area of Gaza known as the Netzarim corridor, May 29, 2025. REUTERS/Ramadan Abed
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Gaza Aid System Under Pressure as Thousands Seek Food

Palestinians walk next to a donkey-drawn cart loaded with aid supplies which they received from the US-backed Gaza Humanitarian Foundation, near an area of Gaza known as the Netzarim corridor, May 29, 2025. REUTERS/Ramadan Abed
Palestinians walk next to a donkey-drawn cart loaded with aid supplies which they received from the US-backed Gaza Humanitarian Foundation, near an area of Gaza known as the Netzarim corridor, May 29, 2025. REUTERS/Ramadan Abed

After a slow and chaotic start to the new US-backed aid system in Gaza, thousands of Palestinians have been arriving at distribution points, seeking desperately needed food despite scenes of disorder and fears of violence.

The two hubs run by the Gaza Humanitarian Foundation (GHF), a private group sponsored by the United States and endorsed by Israel, have been running since Tuesday, but the launch was marred by tumultuous scenes when thousands rushed the fences and forced private contractors providing security to retreat.

An Israeli military official told Reuters that the GHF was now operating four aid distribution sites, three in the Rafah area in the south and one in the Netzarim area in central Gaza.

The new system has been heavily criticized by the United Nations and other aid groups as an inadequate and flawed response to the humanitarian crisis left by Israel's 11-week blockade on aid entering Gaza.

Wessam Khader, a 25-year-old father of a three-year-old boy, said he had gone to a site near Rafah, despite widespread suspicions of the new system among Palestinians and warnings from militant group Hamas to stay away.

He said he had gone every day since Tuesday but only obtained a 3 kg (6.6 pounds) package containing flour, canned sardines, salt, noodles, biscuits and jam on the first day.

"I was driven by the hunger, for several weeks we had no flour, we had nothing in the tent," he told Reuters by telephone from Rafah. "My son wakes every day asking for something to eat and I can't give him."

When he arrived with his father and brother, there were thousands there already and no sign of the identification process that Israeli officials had said would be in place to screen out anyone considered to have links to Hamas.

"I didn't see anything, no one asked for me for anything, and if there was an electronic gate or screening I think it collapsed under the feet of the crowds," he said. The gates, the wire fences were all brought down and even plastic pipes, metal boards and fencing material was carried off.

"People were hungry and they took everything at the site," he said.

Earlier this week, GHP said it had anticipated such reactions from a "distressed population".

For Palestinians in northern Gaza, cut off from the distribution points in the south even that remains out of reach.

"We see videos about the aid, and people getting some, but they keep saying no trucks can enter north where we live," said Ghada Zaki, a 52-year-old mother of seven in Gaza City, told Reuters via chat app.

AIR STRIKES

Israel imposed the blockade at the beginning of March, saying supplies were being stolen by Hamas and used to entrench its control over Gaza. Hamas denies stealing aid and says it has protected aid trucks from looters. Even as thousands made their way to the distribution site, Israeli jets continued to pound areas of Gaza, killing at least 45 people on Thursday, including 23 people in a strike that hit several houses in the Bureij camp in the central Gaza Strip, Palestinian medical workers said.

The Israeli military said it hit dozens of targets in Gaza overnight, including what it said were weapons storage dumps, sniper positions and tunnels. Speculation around a possible ceasefire agreement grew after US President Donald Trump's special envoy Steve Witkoff said the White House was preparing a draft document that could provide the basis for an agreement.

However, it was unclear what changes to previous proposals were being considered that might overcome the deep differences between Hamas and Israel that have stymied previous attempts to restore a ceasefire deal that broke down in March after only two months.

Israel has insisted that Hamas disarm completely and be dismantled as a military and governing force and that all of the 58 hostages still held in Gaza must come back before it will agree to end the war.

Hamas has rejected the demand to give up its weapons and says Israel must commit to ending the war for a deal to work.

Israel has come under increasing international pressure, with many European countries that have normally been reluctant to criticize Israel openly demanding an end to the war and a major humanitarian relief effort.