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Monday, 11 April 2022

Lebanon is getting an IMF rescue package — if it can implement fiscal reforms

Lebanon lands IMF funding: The IMF has decided to offer Lebanon a USD 3 bn, 46-month extended fund facility (EFF) following a visit with Lebanese authorities, the lender said in a statement yesterday. The EFF aims to help Lebanon “rebuild the economy, restore financial sustainability, strengthen governance and transparency, and increase social and reconstruction spending.” The country has been facing runaway inflation and a currency crisis after defaulting on over USD 30 bn worth of debt last year.

Naturally enough, the facility comes with strings attached: Lebanese authorities will need to undertake a series of reforms, including measures to reduce public debt and ensure a “more equal and transparent distribution of the tax burden,” the IMF wrote. Authorities have agreed to enact “several critical reforms” — including finalizing a debt restructuring strategy — ahead of an IMF board meeting, where the lender will grant final approval on the aid package if its conditions are met.

Also worth knowing this morning: Iran wants some sanctions lifted as a sign of goodwill from the US after negotiations to revive the 2015 nuclear agreement stalled, Foreign Minister Hossein Amirabdollahian said yesterday. (Reuters)

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