The Lebanese government declared bankruptcy following an economic recession that lasted more than two years.
UPDATE April 21, 4:39 p.m.: Since the announcement of Lebanon’s bankruptcy, the Gulf Cooperation Council (GCC), which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, offers its support to Lebanon. For the first time in 30 years, Lebanon’s central bank would count its assets in gold and the International Monetary Fund (IMF) announced that it had reached an agreement with Lebanon to provide a $3 billion financial package on a 46 month period to help it overcome its current economic collapse.
On Monday April 4, Lebanese Deputy Prime Minister Saadeh al-Shami announced “the bankruptcy of the State and the Central Bank of Lebanon”.
Speaking to Saudi Arabia’s al-Arabiya channel, Saadeh said the losses would be distributed to the state, Banque du Liban, banks and depositors. “There is no conflict of opinion on the distribution of losses,” he added.
“Unfortunately, the state is bankrupt, as is the Banque du Liban. Our government wanted to find a solution, and the loss occurred because of decades of policies, but if we did nothing, the loss would be much greater.
Saadeh continued, “It’s a fact that can’t be ignored, and we can’t live in a state of denial, and we can’t open (banking) withdrawals to everyone, and I would like us to let’s be in a normal situation”.
Lebanon began talks with the International Monetary Fund in 2021, which were delayed due to political differences between rival groups, then resumed talks in January.
Regarding negotiations with the International Monetary Fund, Sadeeh said, “We are in the midst of negotiations with the IMF and in daily contact with the IMF and we are making great progress.”
However, the Governor of the Central Bank of Lebanon, Riad Salameh, has since told local television station OTV that Saadeh speaks of the state’s inability to contribute significantly to reducing financial sector losses, ” which means he has no cash.
“What is circulating about the central bank failure is not true.” he added.
Lebanon has been suffering from an economic recession for more than two years, a recession considered one of the most severe economic collapses in the world in modern times.
The recession began in October 2019 and plunged more than 75% of the country’s population into poverty, with the Lebanese pound losing more than 90% of its value.
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