Lebanon’s Deputy PM declares country’s bankruptcy

Lebanon's Deputy PM declares country's bankruptcy

BEIRUT: Lebanon’s Deputy Prime Minister Saade Chami has announced “the bankruptcy of the state and the Central Bank” of the cash-strapped nation. “The state has gone bankrupt as did the Central Bank of Lebanon, and the loss has occurred; we will seek to reduce losses for the people,” Xinhua news agency quoted the Minister as saying.

He added that the negotiations to sign a preliminary deal between Lebanon and the International Monetary Fund (IMF) on a package to exit a deep financial crisis in the country are currently underway.

The talks covered the restructuring of the banking sector, an economic recovery plan, approval of the budget as well as a capital control draft bill, he noted. Lebanon has been facing a major financial crisis amid a steep shortage of foreign currency.

The country’s financial experts accused commercial banks of depositing clients’ foreign currency deposits at the Central Bank of Lebanon in return for high interest rates. Meanwhile, the central bank used the clients’ deposits to stabilize the exchange rate of the Lebanese pound and finance the state’s budget deficit, experts said.

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