IMF mission concludes its meetings in Lebanon

Beirut, 18 Sep (KUNA) -- The International Monetary Fund (IMF) mission concluded its intensive series of meetings in Beirut on Friday, which ran from September 15 to 18, as part of its follow-up on the reform trajectory and preparations to reach a staff-level agreement.

The final meeting, held at the Ministry of Finance, included, on the Lebanese side, Finance Minister Yassin Jaber, Economy and Trade Minister Amer Al-Bassat, representatives from the offices of the President of the Republic and the Prime Minister, and Governor of the Banque du Liban (BdL) Karim Saad, along with relevant administrative bodies. On the IMF side, the meeting was attended by mission chief Ernesto Rega and the accompanying technical team.

In a press conference held at the conclusion of the meetings, the Lebanese Finance Minister stated that the discussions "were not limited to the banking file but covered various pillars of the Lebanese economy," and also included meetings with the private sector.

He noted that the discussions primarily focused on "defining the required path for the Financial Gap Law," emphasizing that "addressing the banking crisis, which has persisted for seven years, can no longer afford further delay."

Jaber pointed out that efforts are concentrated on finalizing the law in cooperation with the Parliament and with the support of the President of the Republic, the Speaker of the Parliament, and the Prime Minister, "in order to enable the start of recovering depositors' funds and restoring the banking sector to its role in serving the Lebanese economy."

Jaber clarified that "the first phase of negotiations with the IMF involves reaching a staff-level agreement, similar to the one reached in 2022, but current circumstances differ, with the presence of executive steps and the enactment of reform laws."

He considered that the enactment of the Financial Gap Law, alongside the completion of other financial files, "could enable the transition to a final financial agreement with the Fund, thereby boosting confidence in Lebanon and opening the door to further international support and facilities for the Banque du Liban."

In response to a question, Jaber affirmed that "the start of recovering depositors' funds is linked to the enactment of the Financial Gap Law," noting that the Banque du Liban "will play a fundamental role in this process, with the government and relevant institutions ready to accompany and support it in reforming the banking sector, restoring deposits, and rebuilding confidence in the sector."

Jaber said that despite the difficult circumstances, Lebanon has managed to "maintain financial and monetary stability through cooperation among its institutions," noting that "the enactment of the banking sector restructuring law sent an important reform message that was received positively abroad."

He revealed that he participated, along with Prime Minister Nawaf Salam, in meetings this month with the IMF Managing Director and the World Bank President in Washington, in addition to other meetings aimed at strengthening the negotiation track and reaching an agreement with the IMF as soon as possible.

For his part, Banque du Liban Governor Karim Saad affirmed the continuation of work on the Financial Soundness and Deposit Recovery Law, pointing to positive amendments being introduced to the law.

Saad indicated that the Banque du Liban is "studying the possibilities of repaying deposits in a rational manner, while simultaneously ensuring the necessary liquidity for the financial system."

He noted that by the end of the current year, "a total of $8.1 billion will have been returned to depositors from their funds under Circulars 158 and 166."

In response to a question regarding the existence of a clear mechanism for handling deposits, the Banque du Liban Governor confirmed the existence of such a mechanism, emphasizing that "the goal is to reach an implementable solution that preserves the credibility of institutions toward depositors."

Saad stated that "pausing on certain steps is to ensure that the commitments made to people are realistic and fulfillable."

It is worth noting that the final technical meeting held by the IMF mission at the Ministry of Finance this morning addressed the public debt file, where debt figures were presented and the IMF's approach to its restructuring was discussed.

A meeting was also held last Thursday evening with a delegation from the Electricité du Liban (EDL) to discuss the institution's financial situation and the reform trajectory.

It is noted that the technical and professional meetings held over the past days involved administrations from the Ministry of Finance and the ministries and administrations concerned with the electricity, public works, and social affairs sectors, as well as the Banque du Liban.

These meetings come within the framework of following up on cooperation between Lebanon and the IMF, completing discussions on reform, financial, and economic files, and building on the progress achieved in the reform track, including banking sector reform and continuing work on key files related to financial stability and restoring confidence in the Lebanese economy.

(End) A.I.B. / A.M.S.