Deputy Prime Minister Saade Chaim informed the presidency of the republic of the upcoming completion of preparations for relaunching discussions with the International Monetary Fund, while a controversy is currently taking place over the quantification of losses in the banking sector, the first Minister Najib Mikati indicating that the estimates are complete, which the Governor of the Banque du Liban Riad Salamé denies.
Saade Chami says he hopes to reach a preliminary agreement by the end of the year and a final agreement in January with a view to unlocking aid from the international community.
Banks heavily impacted by the economic crisis
Lebanese banks, for their part, are heavily impacted by the economic crisis that Lebanon is going through. This crisis came to light with the famous foreign currency shortages in May 2019, first blamed on logistical problems by the Banque du Liban before finally recognizing that private institutions were facing major liquidity crises. . The ABL then implemented informal capital controls in November 2019.
So far, Lebanese banks generally refuse to allow depositors to freely dispose of their funds.
As early as 2019, many incidents had then broken out in bank branches, with depositors demanding to be able to withdraw their funds, which bank officials refused when the breakdown of losses in the banking sector, estimated at 69 billion dollars, should soon be detailed. according to the Mikati III government, 83 billion dollars according to the previous government, a figure close to that of the IMF and 103 billion dollars according to certain rating agencies.
In total, the top 14 Lebanese banks alone would require an injection of $ 65 billion, well beyond the possibilities of economic aid estimated at $ 26 billion. Also, haircuts on eurobonds or even on part of Lebanese bonds seem to become inevitable, despite the increase in equity on the decision of a circular from the Banque du Liban.