Lebanon Faces Looming US Financial Sanctions Over Hizbollah Ties

The new US administration’s firmer Iran stance has raised concerns in Beirut of new sanctions aimed at Hizbollah that could destabilize its fragile economy.

The Lebanese government on 24 May reappointed Riad Salamah, the incumbent Governor of the Central Bank of Lebanon (CBL), for a fifth six-year term starting in July. His appointment comes at a critical time as the US ponders an expansion of banking sanctions against the Iran-backed Lebanese Shia party-cum-paramilitary movement Hizbollah.

Mr Salamah is expected to scrupulously comply with any new sanctions against Hizbollah, as he did with sanctions passed in 2015, in order to protect the Lebanese banking sector.

Economists and bankers in Beirut have therefore welcomed his reappointment as a steady hand on the tiller which ensures continuity of monetary policy. They view Mr Salamah’s presence as crucial at this time owing to his strong track record of steering the Lebanese banking system safely away from the negative repercussions of US sanctions targeting some members of Hizbollah, which is an integral element of the Lebanese government and society. (CONTINUED - 1072 WORDS)