The Executive Director of the IMF, Mahmoud Mohieldin, announced that the Fund is conducting consultations between the Fund’s experts and the relevant ministries in Lebanon, in addition to the Banque du Liban, regarding cooperation between the two sides, in light of the stifling economic crisis that Lebanon has been witnessing for years.
On Wednesday, Mahmoud Mohieldin met with Lebanese Finance Minister Youssef Al-Khalil, to discuss preparations for negotiating Lebanon’s economic recovery plan, which the government intends to announce soon.
Mohi El-Din, who holds the position of representative of the Arab countries to the Executive Council of the Fund, said that “what was mentioned by the President of the Republic, the Prime Minister and the Speaker of Parliament reflects a desire to make the relationship with the IMF successful.”
He explained that the talk of the Lebanese officials included the production of an integrated program that includes 4 main dimensions. First giving the necessary priority to social spending, “dealing with the social pressures that people suffer from”.
As for the second dimension, it is related to monetary policies, the exchange rate system, and related legislation, such as managing cross-border financial flows or capital control, according to Mohieddin’s speech.
The third dimension is related to the banking sector, noting that there is a “good understanding with the Central Bank,” stressing that different perceptions can be given in the future regarding the future of the banking sector, and “various measures can be taken to restore confidence in the banking sector and the business of banks.”
Mohieldin pointed out that the fourth dimension is related to structural reforms in vital sectors such as energy and electricity, and expressed his hope that “a program will be found that will bring benefit to Lebanon and its people and achieve confidence in the economy.”
The financial crisis in Lebanon, which the World Bank described as “one of the most severe recessions in modern history”, was exacerbated by a political crisis that has been going on for more than a year, before Mikati formed the new government.
The Lebanese currency has lost 90% of its value, three-quarters of the population has slipped into poverty, and daily life has become
constant suffering due to the lack of basic commodities such as fuel and medicine.