Lebanon has resumed talks with the IMF and is ready to resume talks with creditors after more than a year of political crisis in Beirut, the new government said on Monday.
Lebanon’s finance ministry has said in a statement that it has “reconnected” with the IMF and has expressed “willingness to move forward with an agreement on a comprehensive recovery plan”.
It said the government was committed to “honest negotiations with all creditors”, and welcomed slaves to “participate” in the process.
Newly-appointed Prime Minister Najib Mikati has said the program with the IMF “was not an option” if the country concerned is experiencing a recession and economic crisis, which is so severe that The World Bank has said it may have been one of the most dramatic events in the world for 150 years.
More than half of the world’s debt-ridden people are said to be falling into poverty, while Lebanon’s fragile weapons are not doing well. Calling for an economic crisis has led to a shortage of drugs to fuel. The local currency has lost 90% of its value and inflation has plummeted.
One of the main causes of the collapse, which escalated at the end of 2019, was the constant payment to the Lebanese people, which was much larger than his wealth and caused his foreign currency to collapse. The World Bank estimates that Lebanon’s debt rises by 174 interest rates by the end of 2020.
With declining stocks and domestic banking problems taking place, Lebanon he stopped paying on its $ 31bn pile of foreign debt over 18 months ago, for the first time Beirut failed to repay.
But negotiations with creditors came to a halt after the deadly Beirut explosive port forced the government to resign in August 2020. The new government was elected in September, after 13 months of political turmoil.
A a group of debtors in Lebanon he also said at the end of September that the debt “requires the new government to expedite it”. Dealers, including BlackRock and London-based market expert Ashmore, could see a 75% reduction in spending on their prices, a Goldman Sachs researcher wrote last month.
Lebanese bonds, which have not paid interest rates since March last year, are now trading at about 17 cents per dollar, down below 12 cents earlier this year.
“In one way or another you are talking about brutal shaving,” said Raza Agha, head of the coming market for debt repayment at Legal & General Investment Management, which has “very low” debt in Lebanon. “Another political shift is one thing, but a fresh start cannot be a matter of a year or two. It will be a long time.”
Debt restructuring is very important for those who can help you, who may be willing to help Lebanon financially if they believe the country has a reliable idea of a return.