Lebanon to strike preliminary deal with IMF soon, reports say

Local broadcaster says an agreement for financial aid could be reached in January or February

Bank customers scuffle with Lebanese soldiers during a protest in Beirut. Lebanon is experiencing an unprecedented financial crisis, and an IMF deal is widely regarded as the only way for it to secure aid. Photo: EPAShow less

Lebanon could strike a preliminary deal for financial support with the International Monetary Fund in January or February, according to local news reports that cited the country's deputy prime minister.

Saadeh Al Shami was quoted by broadcaster Al Jadeed on Sunday as saying a ministerial committee had agreed with Lebanon's central bank governor that losses in the struggling country's financial sector amounted to $69 billion.

The IMF is to assess that calculation but an agreement on the figure would be a crucial first step for Lebanon's government as it seeks to negotiate a support programme.

The fund has said preparatory technical discussions with the Lebanese authorities are under way. These are to lay the groundwork for an IMF-backed programme.

Lebanon is experiencing an unprecedented financial crisis, and an IMF deal is widely regarded as the only way for it to secure aid.

On Sunday, UN Secretary General Antonio Guterres said the international community had not done enough to support Lebanon, which is grappling with a dire economic crisis and is home to more than a million Syrian refugees.

Mr Guterres called for more support at the start of a high-profile, three-day visit to country, during which he met President Michel Aoun.

Mr Guterres said his visit will focus on supporting the Lebanese people but he pressed the country's political leadership to overcome their differences to find ways to resolve the crisis.

UN Secretary General Antonio Guterres, left, and Lebanon's President Michel Aoun in the presidential palace near Beirut on Sunday. Photo: Reuters

International donors, including traditional supporters of Lebanon, have extended humanitarian assistance to the country, but have declined to back the government before a reform plan is agreed upon.

Lebanon's people are facing a deteriorating economic crisis that began in late 2019 and is rooted in years of mismanagement and corruption.

The crisis, including a collapse of the national currency and deepening poverty, has been compounded by the Covid-19 pandemic, bickering among rival political groups and a massive explosion at the port of Beirut in August last year that left at least 216 people dead and injured thousands. It also destroyed major parts of the capital.

“I believe the international community has not done enough to support Lebanon … and other countries in the world that have opened their borders, doors and hearts to refugees when, unfortunately, some much more richer and much more powerful close their borders,” Mr Guterres said, speaking beside Mr Aoun.

He said a 12-month UN emergency response plan unveiled in August – which is asking for $383 million to support 1.1 million people – is only 11 per cent funded so far.