Fun

Lebanon’s Financial Meltdown: Currency Plunges 80%, Huge Losses at Central Bank, IMF Bailout Stalled

News Feed - 2020-06-29 08:06:54

Lebanon"s Financial Meltdown: Currency Plunges 80%, Huge Losses at Central Bank, IMF Bailout Stalled


The financial crisis in Lebanon has seen its currency, the Lebanese pound, fall 80%. The International Monetary Fund (IMF) has estimated that the country’s central bank has accumulated losses as much as 170 trillion pounds. The disagreement between the Lebanese government and the central bank has stalled bailout discussions.


The economic and financial crisis in Lebanon has deepened as the local currency has been in a free-fall. The Lebanese pound sold at a rate of 8,000 to the U.S. dollar on Sunday at local exchanges, losing about 80% of its value over the past 10 months.


The IMF has warned Lebanon that its central bank, Banque du Liban, has accumulated losses of up to 170 trillion pounds, the Financial Times reported on Thursday. The publication explained that the central bank has used “a series of sovereign debt and currency swaps with local lenders … to shore up the banking sector, attract foreign currency and stabilize the Lebanese pound.” Citing people familiar with the matter, the publication reported that the IMF told the Lebanese finance minister and central bank governor:That activity, combined with the impact of Lebanon’s default in March on the bank’s sovereign bond holdings and a collapse in the value of the currency, has resulted in accumulated losses of about L£170tn.


The losses equate to 91% of Lebanon’s total economic output in 2019 and are almost equal to the total value of the deposits held by the central bank from the country’s commercial banks, the news outlet conveyed. The pound had been pegged at 1,507.5 to the U.S. dollar since 1997.


An IMF spokesperson said last week, “Our estimates are broadly consistent with those in the government’s plan.” The central bank and some members of parliament, however, argued that the losses are substantially lower.




The disagreement between the Lebanese government and the central bank has put the prospect of obtaining much-needed emergency financing from the IMF at risk. IMF Managing Director Kristalina Georgieva said Friday that she did not “expect progress in the negotiations with the Lebanese officials.” Georgieva added: “IMF officials are still working with Lebanon, but it is not clear whether it is possible for the country’s leaders, active parties, and society to agree on implementing the reforms needed to stabilize the economy and boost economic growth.”


However, “Not accepting the diagnostic simply means that the IMF [will] walk away,” commented Henri Chaoul, a banker and former advisor to the government in the IMF talks. He resigned from his advisory role at the Ministry of Finance on June 17. Lebanon’s fiscal and monetary policy has come undone over the past six months, following weeks of anti-government protests.


What do you think about the crisis in Lebanon? Let us know in the comments section below.Bitcoin.org Maintainer Calls for the Removal of Cobra, Website Owner Then Fires HimNEWS | 9 hours agoJim Rogers, Mark Cuban, Peter Schiff Will "Go All-In" on Bitcoin, Says Max KeiserNEWS | 2 days agoTags in this storyLebanon, lebanon crisis, lebanon currency collapse, lebanon currency crash, lebanon financial crisis


Image Credits: Shutterstock, Pixabay, Wiki CommonsUse Bitcoin and Bitcoin Cash to play online casino games here.Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.Read disclaimer Show comments

News Feed

Alex Labs freezes $3.9M of exploited funds sent to CEXs after hack
Christopher Roark2 hours agoAlex Labs freezes $3.9M of exploited funds sent to CEXs after hackThe team behind the Bitcoin layer-2 developer has successfully frozen some exploited crypto after the attacker tried to cash o
Russian Government to Present Regulatory Scenarios for Cryptocurrencies Within a Week, Report
Russian Government to Present Regulatory Scenarios for Cryptocurrencies Within a Week, Report The federal government of Russia should be ready with different regulatory scenarios f
Vladimir Putin Says Russia Wrote Off African Countries’ Debts Totaling Over $20 Billion in 2022
Vladimir Putin Says Russia Wrote Off African Countries" Debts Totaling Over $20 Billion in 2022 African countries’ debts totaling more than $20 billion were written off in th
XRP Price At Risk Of 20% Crash To $1.55 If This Level Fails To Hold
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Bastyon Inventor Daniel Satchkov Explains the Importance of Using an Open Source Social Media Platform
Bastyon Inventor Daniel Satchkov Explains the Importance of Using an Open Source Social Media Platform Bastyon.com is a social platform built on the Bitcoin foundation. It is decen
Zhiyuan Sun7 hours agoPlatypus Finance recovers 90% of assets lost in exploitThe project has agreed to not pursue legal action against the hacker.1085 Total views15 Total sharesListen to article 0:00NewsJoin us on social
Car Manufacturer Maruti Suzuki Launches Metaverse Showroom Experience in India
Car Manufacturer Maruti Suzuki Launches Metaverse Showroom Experience in India Maruti Suzuki, one of the biggest car manufacturers in India, has announced that it is taking its cus
Kevin O’Leary Expects Bitcoin to Go up When Stablecoin Transparency Act Passes
Kevin O"Leary Expects Bitcoin to Go up When Stablecoin Transparency Act Passes Shark Tank star Kevin O’Leary, aka Mr. Wonderful, expects the price of bitcoin to go up when th
Crypto market’s ‘perfect storm’ can lead to further massive capitulation
Daniel Ramirez-Escudero3 hours agoCrypto market’s ‘perfect storm’ can lead to further massive capitulationA rapid decline in the traditional markets has spread to cryptocurrencies, obliterating them with a signific
MEXC says ‘clawbacks’ only affect delinquent traders as users report missing funds
Christopher Roark3 hours agoMEXC says ‘clawbacks’ only affect delinquent traders as users report missing fundsA growing number of traders have complained of funds being deducted from their MEXC accounts, but the exch
Maduro Plans to Airdrop Petro to Municipal Leaders and Eligible Citizens
Maduro Plans to Airdrop Petro to Municipal Leaders and Eligible Citizens The president of Venezuela, Nicolás Maduro wants the nation state-issued cryptocurrency, petro (PT
Arijit Sarkar13 hours agoScammers prefer banking customers over crypto investors in Ireland: ReportTo date, Irish authorities managed to recover approximately 4 million euros of the 20 million euros lost in banking scams