Central Bank of Lebanon Governor Riad Salameh said he hopes to meet the preconditions set by the International Monetary Fund in an expert-level agreement with Lebanon in order to obtain the approval of the Fund's Executive Board to finance Lebanon.

In a text message to Reuters today, Friday, Salameh described the agreement with the IMF as a “positive event for Lebanon,” and explained that “the agreement will contribute to unifying the exchange rate,” and said that the central bank “cooperated and facilitated the task.”

The International Monetary Fund had said yesterday, Thursday, that it had reached a draft financing agreement with Lebanon, but Beirut needed to implement a set of economic reforms before the Executive Council decided to ratify the agreement.

The initial agreement included a $3 billion aid plan, after a preliminary agreement on economic policies with Lebanon, to facilitate an extended funding period for 4 years.

With the support of IMF experts, the Lebanese authorities formulated a comprehensive economic reform program aimed at rebuilding the economy, restoring fiscal sustainability, enhancing governance and transparency, removing barriers to job growth, and increasing social spending and reconstruction.

The statement said that the agreed program is subject to the management of the IMF and the approval of the Executive Board, and the Lebanese authorities have agreed to carry out several critical reforms before the meeting of the International Fund Board of Directors.

He added, "Funding of support on highly concessional terms from Lebanon's international partners will be necessary to support the authorities' efforts, and to ensure adequate funding for the program and the fulfillment of its objectives."

Survival visa

On Thursday, Lebanese Prime Minister Najib Mikati considered that the reforms included in the initial agreement with the IMF are a "visa" for donor countries to cooperate with his country, which has been mired in an economic collapse for more than two years.

1/9 The Deputy Prime Minister, His Excellency Al-Shami, issued the following statement:


The Lebanese delegation assigned by the Council of Ministers to negotiate with the International Monetary Fund mission reached a preliminary agreement on an economic and financial correction program under the name of the “Extended Fund Facility” for a period of four years… #Lebanon

— Presidency of the Council of Ministers 🇱🇧 (@grandserail) April 7, 2022

And last January, Lebanon began the first round of official negotiations with the IMF, which has long stressed that it will not provide any financial support as long as the government does not agree to initiate ambitious reforms necessary to get the country out of the economic crisis, on top of which is budget correction, banking sector restructuring and reform. public institutions and firmly address the rampant corruption.

Prior measures include the government’s approval of a plan to restructure the banking sector, parliament’s approval of the 2022 budget, and the unification of the exchange rate of the lira (the local currency), which has lost more than 90% of its value against the dollar.

Since 2019, Lebanon has witnessed an unprecedented economic collapse, which the World Bank has ranked among the worst in the world since the middle of the last century.

This is accompanied by political paralysis that prevents taking reform steps to reduce the deterioration and improve the quality of life of the population, more than 80% of whom live below the poverty line.