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Lebanon-IMF talks make little progress despite bank collapse

The Lebanese ruling elite is still bargaining over the economic reforms required by the International Monetary Fund, while the country’s economic situation continues to go downhill.
Lebanese Army soldiers roll away a flaming tire from the fence surrounding the local branch of the Banque du Liban (Lebanese Central Bank) as protesters gather to demonstrate against dire economic conditions in the northern city of Tripoli on June 11, 2020. - The Lebanese pound sank to a record low on the black market on June 11 despite the authorities' attempts to halt the plunge of the crisis-hit country's currency, money changers said. Lebanon is in the grips of its worst economic turmoil in decades, and

Central Bank of Lebanon Gov. Riad Salameh gave an interview to the Arab News outlet Aug. 25, saying that depositors’ money in Lebanon was still available despite arbitrary capital controls. The governor noted that the ban on international transfers would be resolved once reforms were implemented. Experts nonetheless believe that most of the political class intends to avoid reforms at all cost, shifting instead all losses on private business and depositors to maintain its grip on the system. The resignation of the fourth Lebanese negotiator with the International Monetary Fund (IMF) is an indicator they might right. However, foreign lenders could have a better chance with an international recourse.

Lebanese bankers do not seem to all share Salameh's optimistic account. In a previous interview with Al-Monitor, a senior manager working at one of the top 10 Lebanese banks admitted, “Banks are currently operating in a situation of complete illegality in the absence of a capital control law. Clients do not have free access to their dollar deposits and can’t make international transfers, and it does not look like it’s going to change soon in the current apathy of the state.”

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