Lebanon needs the help of the IMF to draft a rescue plan and decide what to do about its maturing debt/Bloombergby Bloomberg
Lebanon has asked the International Monetary Fund (IMF) to send a technical team to discuss policy options and assess the situation in the economy as the government faces looming debt repayments and its predicament grows more dire.
The IMF is expected to respond and dispatch a delegation soon.
With the country facing its worst financial crisis in decades after months of protests, Lebanon’s foreign debt sank to a record low this week as speculation mounted that the government may not repay a $1.2 billion Eurobond due in less than a month.
Lebanon needs the help of the IMF to draft a rescue plan and decide what to do about its maturing debt, said Nabih Berri, the Lebanese Speaker of Parliament. Berri said that Lebanon should form a task force comprising the premier, ministers of economy and finance as well as legal and financial experts.
As Lebanon’s government grapples with an economic crisis that has fuelled increasingly violent protests, the heavily indebted country must urgently decide on how to deal with fast-approaching debt payments, including a $1.2 billion Eurobond due on 9 March 2020.
Lebanon was seeking advice on the March 2020 Eurobond “amid concerns that any reprofiling of Lebanon’s debt should be conducted in an orderly way to avoid damaging the country’s banking system.
Lebanese banks holding the bulk of the sovereign debt have piled pressure on the state to pay the March 2020 Eurobond on time. The banks have in recent months imposed tough controls on hard currency amid dwindling reserves and fears of capital flight.