Lebanon hopes for new staff-level agreement with IMF — Asharq Al-Awsat

Lebanon expects to reach a new staff-level agreement with the International Monetary Fund. To launch a full-fledged lending program, the country must adopt a law on distributing losses from the 2019 financial crisis. Finance Minister Yassine Jaber said this, Asharq Al-Awsat reports.

Meeting with IMF leadership

Jaber was in Washington to meet with IMF Managing Director Kristalina Georgieva. According to him, Lebanon has been seriously working on financial reforms over the past 18 months, so it is necessary to begin work on a full Fund program, which is expected to include loans.

The minister called the adoption of the bank restructuring law an important signal to the IMF and the world of the Lebanese government’s and parliament’s seriousness about reforms. The IMF welcomed this law in August.

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Financial gap law

According to Jaber, a full-scale agreement with the IMF will require the adoption of a law on the financial gap. The legislation must determine how losses from the 2019 financial collapse will be distributed among the state, the central bank, commercial banks, and depositors.

In 2022, the government estimated these losses at approximately $70 billion, and this amount is likely higher now. The distribution of losses should allow depositors who do not have access to their savings to gradually recover their funds.

Lebanon first reached a staff-level agreement with the IMF in April 2022, but the promised changes were implemented slowly. One source familiar with the process said a new agreement could have been signed as early as Monday, while another expected it by the end of the year. In any case, the full program will require separate approval by the IMF Executive Board.