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NewsThe International Monetary Fund warns of the extremely dangerous situation in Lebanon

The International Monetary Fund warns of the extremely dangerous situation in Lebanon



Today, the International Monetary Fund warned of the extremely dangerous situation in Lebanon, a year after its commitment to reforms that have not yet been implemented, calling on the Lebanese government to stop borrowing from the central bank.

Ernesto Rejo, head of the fund mission, said during a press conference that the authorities should speed up the implementation of the fund’s requirements to obtain a $3 billion bailout package, adding. "We expected more in terms of implementing and passing legislation related to the required reforms.. but progress is very slow in this regard".

That explained "Lebanon is in a very dangerous situation"continuing his saying "Over the years, the government has been borrowing from the Central Bank not only in the past but also in the past few months, which is something we have recommended to stop.. Therefore, we stress that there is no point in borrowing more from the Central Bank".

As mentioned "Suffice it to say that the loss is so great that unfortunately there must be a distribution of losses between the government, banks and depositors"but stressed that the IMF "It will never withdraw from efforts to assist a member state, and there is no deadline for Lebanon to implement reforms".

Lebanon signed a staff-level agreement with the IMF about a year ago, but it has not met the conditions needed to receive the full program, which is essential for its economy to recover from one of the world’s worst financial crises.

The IMF warned in a written statement after Rigo’s statements that Lebanon "He will plunge into an endless crisis" If quick fixes are not implemented.

The economy was also paralyzed by the collapse of the currency, which lost about 98 percent of its value against the dollar since 2019, which contributed to a significant rise in levels of inflation, poverty and emigration abroad, at a time when the government estimates total losses in the financial system at more than $70 billion, most of which are owed to the Banque du Liban. .

Copyright © 2023 The Eastern Herald.

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