Karim Souaid: Lebanon's new central bank chief faces daunting task

Asset manager is regarded as having the support of Lebanon's powerful banking lobby

Karim Souaid is expected to play a key role in Lebanon's economic recovery after being appointed governor of the central bank. Lebanese Presidency / AFP

As the newly appointed governor of Lebanon's central bank, Karim Souaid has become a key player in the daunting task of plotting Lebanon's path to economic recovery and leading a much-maligned state institution.

Mr Souaid is the founder and managing partner of Growthgate Capital, a private investment firm established in late 2006.

He is regarded as being favoured by the banking lobby in Lebanon and garnered the support of President Joseph Aoun for the role of central bank governor. Prime Minister Nawaf Salam was opposed to his appointment.

Before founding Growthgate, Mr Souaid was the managing director of Global Investment Banking at HSBC Middle East from 2000. He has also been involved in privatisation initiatives in a number of Arab countries.

He studied law at Lebanon's St Joseph University and has a Master of Law degree from Harvard University. He has also worked as a corporate finance attorney in New York, and is a member of the New York State Bar Association, according to his official biography.

Mr Souaid is a Maronite Christian, the sect for whom the post of central bank chief is reserved under Lebanon's confessional system. The appointment is made by cabinet decree for a six-year mandate that can be renewed multiple times, based on the finance minister's recommendation.

A number of prominent figures in Lebanese finance sit on the board of directors of Growthgate including Varouj Nerguizian, described as an independent director, who is a financial affairs adviser to Mr Aoun. Also on Growthgate's board is Maher Mikati, whose billionaire father Najib was Lebanon's previous prime minister.

Opponents of Mr Souaid's appointment point to such links as evidence that he is not the clean break from the past that Lebanon needs.

The central bank chief's role is regarded as crucial for Lebanon as it works to implement much-needed economic reforms and address the deep financial losses incurred since the onset of an economic crisis in 2019 – described as one of the worst in modern history.

The collapse – widely blamed on corruption and financial mismanagement by Lebanon's ruling class – plunged much of the population into poverty. The life-savings of many Lebanese evaporated almost overnight as the local currency plummeted.

Mr Souaid's predecessor, Riad Salameh, is one of Lebanon’s most controversial figures and had held the governor's role for three decades following the 1975-1990 civil war. Initially regarded as a genius and saviour, Mr Salameh's stock plummeted in recent years. He stepped down from the post in 2023 and was arrested in Lebanon last year over embezzlement, money laundering, and fraud allegations. The US and UK are among the countries that have sanctioned him.

Lebanon's problems have been greatly exacerbated by the year-long war between Israel and the Lebanese Iran-backed militant group Hezbollah. The World Bank recently estimated the cost of reconstruction and recovery at $11 billion.

Lebanon's new government under Mr Salam, who was appointed in January, has shown interest in renegotiating the $3 billion staff-level agreement reached with the International Monetary Fund in April 2022.