The IMF has begun “preparatory” talks with Lebanon on a new aid package after receiving an official request from Beirut, an IMF spokesman said Thursday.
That will be a welcome relief to the new government that is trying to stem an economic crisis the World Bank brands as one of the worst since the mid-19th century, and which has caused Lebanon’s currency to collapse.
“The IMF has received a letter from Prime Minister (Najib) Miqati of Lebanon expressing the authorities’ interest in a fund program,” said International Monetary Fund spokesman Gerry Rice.
“And I can tell you that preparatory technical discussions have started.”
Lebanon hopes the talks with the Washington-based crisis lender will help unlock billions of dollars in financial aid.
After defaulting on its debt in March 2020 for the first time in history, the country started talks with the IMF but they hit a brick wall amid bickering over who should bear the brunt of the losses.
Rice said the talks are looking at what steps to take to stabilize the nation’s economy.
“Clearly, strong policies and reforms are needed to address the really unprecedented economic and social crisis facing Lebanon and the Lebanese people,” Rice said.
IMF Managing Director Kristalina Georgieva met Miqati last week, and said the fund stands “fully ready” to help the struggling nation.
Lebanon’s currency, the pound, has lost almost 90 percent of its value against the dollar on the black market since 2019, and people’s savings are trapped in banks.
Inflation has soared, and 78 percent of all Lebanese now live in poverty, according to the U.N.
Power cuts are common in the country and basic goods including petrol and medicine have become scarce.