IMF warns Lebanon at 'very dangerous moment'

AFP , Thursday 23 Mar 2023

Crisis-hit Lebanon is "at a very dangerous moment", a visiting delegation of the International Monetary Fund said on Thursday, criticising slow progress on reforms needed to unlock billions in loans.

Demonstrators walk through tear gas fumes during a protest by retired Lebanese army and security forces veterans outside the government palace headquarters in the centre of Beirut on March 22, 2023, demanding inflation-adjustments to their pensions. ( AFP)


Lebanon and the IMF reached a conditional agreement in April 2022 on a $3-billion-dollar loan needed to save its economy, which has been in free fall since 2019.

But nearly a year after Beirut signed the agreement, officials have yet to enact the substantial changes required to kickstart the 46-month financing programme.

"We think Lebanon is at a very dangerous moment, at a crossroads," said Ernesto Ramirez Rigo, who headed the IMF delegation in Beirut, warning the continued "policy of inaction is going to leave Lebanon in a never-ending crisis".

"Time has a gone by, it's almost a year since we have reached an agreement," Rigo added, urging leaders to implement the reforms swiftly.

In September the IMF had already condemned Beirut's "very slow" progress on implementing these reforms.

The lender had conditioned the funds on a series of measures, notably unifying the country's plethora of exchange rates, a reformed bank secrecy law as well as restructuring the banking sector and the implementation of formal capital controls.

As reforms drag, the market value of the Lebanese pound reached historic lows against the US dollar this month.

The pound has been fluctuating at more than 100,000 against the greenback -- a dizzying plunge from 1,507 before the economic crisis hit in 2019.


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