News
Latest News
news bulletin
Breaking Headlines
Israel-Gaza War Updates
Variety and Tech
Sports News
Middle East News
World News
Lebanon News
Press Highlights
Lebanon Economy
News Bulletin Reports
Other News
Breaking Headlines
Israel-Gaza War Updates
Variety and Tech
Sports News
Middle East News
World News
Lebanon News
Press Highlights
Lebanon Economy
News Bulletin Reports
Beirut
19
o
Mount Lebanon
19
o
Metn
20
o
Keserwan
20
o
North
20
o
South
19
o
Bekaa
12
o
Live
Video
Audio
Schedule
shows
العربية
watching now
Jadal
SUBSCRIBE
Home
Notification
Live
Video
Audio
shows
Beirut
19
o
Mount Lebanon
19
o
Metn
20
o
Keserwan
20
o
North
20
o
South
19
o
Bekaa
12
o
News
Programs
The News
Breaking Headlines
Israel-Gaza War Updates
Variety and Tech
Sports News
Middle East News
World News
Lebanon News
Press Highlights
Lebanon Economy
News Bulletin Reports
Programs
Documentaries
Lebanon’s Centennial
News Bulletin
The Untold History
Talk Show
Series
Sports
Variety
Other
Comedy
Oldies
Breaking News
Latest News
Highlighted News
Most Read
Videos
العربية
Watch the latest programs and the latest developments on your favorite screen
Shows
Join millions of followers
Who We Are
Contact Us
Advertise With Us
Careers
Channel frequencies
Privacy Policy
Terms and Conditions
Lebanon draft crisis plan sees need for $10 bln-$15 bln and depositor contribution
Breaking Headlines
2020-04-08 | 10:55
High views
Share
Share
Lebanon draft crisis plan sees need for $10 bln-$15 bln and depositor contribution
Watch now
More details about online video viewing packages
5
min
Lebanon draft crisis plan sees need for $10 bln-$15 bln and depositor contribution
Lebanon requires net external financing of $10 billion-$15 billion over the next five years to help it through its financial crisis, according to a draft government plan seen by Reuters.
The draft plan, which is being discussed by cabinet, marks the most comprehensive blueprint yet on tackling the crisis. In it, the plan is described as a "good basis" in case of negotiations with the IMF.
Lebanon has yet to decide whether it will go the IMF, though analysts see this as the only way it can get aid.
The plan, which a source said was drafted by Lebanon's financial adviser Lazard, noted investors were expecting Beirut to seek IMF support which would unlock other financing.
While mapping out losses of $83.2 billion in the economy, the plan noted that a "full bailout of the financial sector is not an option".
It sets out a restructuring of the central bank and commercial banks to include "a transitory exceptional contribution from large depositors" and outlines a special fund to compensate depositors’ losses resulting from restructuring.
"As stated by the prime minister, the plan will make sure the assets of 90% of the depositors are preserved," it said.
Parliament Speaker Nabih Berri has come out strongly against any haircut on bank deposits, calling them sacred.
The plan includes other politically difficult steps such as a five-year freeze in state salaries - the value of which is being eroded by inflation - and reforming the costly state pension system. "Lebanese people are faced with several years of economic hardships," it said.
The plan is based on assumptions that include prompt external financial support and successful implementation of reforms - something Lebanon has long failed to do.
It sees the overall government deficit narrowing from 11.3% of GDP in 2019 to 1.3% by 2024 and public debt being cut to 90% of GDP by 2027 from 176% last year.
Lebanon's crisis is rooted in decades of state corruption. Last month, Lebanon defaulted on its hefty foreign-currency debt. A coronavirus lockdown has compounded economic problems which include a weakening currency and capital controls that have denied savers access to dollar savings.
Nafez Zouk, emerging markets strategist at Oxford Economics, said it was encouraging the plan acknowledged the size of the problem. "There's a reform program which sounds like something the IMF would want to see and there's a recognition of the need for consolidation of the banking system," he said.
EXCHANGE RATE TO WEAKEN
The plan indicated the exchange rate weakening to 2,607 pounds to the dollar in 2021, and to 2,979 in 2024 from the current peg of 1,507.5 pounds. The pound has lost more than 40% of its value since October on a parallel market.
The $83.2 billion losses stem from the impairment of assets held by the central bank, the impairment of banks' loans portfolio and government debt restructuring.
The plan estimated $40 billion in embedded losses at the central bank, the result of "years of loss-making financial transactions" to accumulate FX reserves to defend the peg and cover a balance of payments funding gap.
A phased restructuring of commercial bank balance sheets would include a full bail-in of existing shareholders estimated at $20.8 billion in capital write-offs, with the remaining $62.4 billion covered by the "transitory exceptional contribution from large depositors".
"The exact parameters of the contribution will be defined with the assistance of external advisers and in the context of a broad and good-faith dialogue with the commercial banks."
A special fund would compensate depositors' losses, with the proceeds coming from a program that will track and recover ill-gotten assets.
REUTERS
To watch the full report, please click on the video above.
Breaking Headlines
Lebanon
Economy
Next
Grand Mufti Derian travels to Saudi Arabia for Hajj
Recommended For You
d-none hideMe
0
Lebanon News
2024-04-17
Israeli warplanes strike agricultural land near Baalbek: Three missiles launched
Lebanon News
2024-04-17
Israeli warplanes strike agricultural land near Baalbek: Three missiles launched
0
Middle East News
2024-04-16
Israeli army detects missile launches from Lebanon
Middle East News
2024-04-16
Israeli army detects missile launches from Lebanon
0
Lebanon News
2024-04-16
Breaking: Car targeted on Al-Majbal road in Ain Baal
Lebanon News
2024-04-16
Breaking: Car targeted on Al-Majbal road in Ain Baal
0
Middle East News
2024-04-15
Israeli response to Iranian attack expected soon: Israeli Broadcasting Corporation
Middle East News
2024-04-15
Israeli response to Iranian attack expected soon: Israeli Broadcasting Corporation
Subscribe to our VOD
SUBSCRIBE
Our visitors readings
d-none hideMe
0
News Bulletin Reports
12:25
The aftermath: Iran faces new sanctions following attack on Israel
News Bulletin Reports
12:25
The aftermath: Iran faces new sanctions following attack on Israel
0
Middle East News
2023-11-13
Al-Qassam Brigades targets two Israeli tanks in Northern Gaza
Middle East News
2023-11-13
Al-Qassam Brigades targets two Israeli tanks in Northern Gaza
0
World News
2023-11-15
Spain intends to work towards ‘recognition of the Palestinian state’
World News
2023-11-15
Spain intends to work towards ‘recognition of the Palestinian state’
0
World News
2024-04-10
US military destroys Houthi missile targeting a ship in the Gulf of Aden
World News
2024-04-10
US military destroys Houthi missile targeting a ship in the Gulf of Aden
Videos
d-none hideMe
0
Lebanon News
2023-12-11
Breaking: Israel launches raid north of Litani on Monday (Video)
Lebanon News
2023-12-11
Breaking: Israel launches raid north of Litani on Monday (Video)
0
Lebanon News
2023-11-02
Exclusive to LBCI: U.S. State Department's Wooster Stresses Lebanon Must Avoid War, Sees Renewed Push for Two-State Solution
Lebanon News
2023-11-02
Exclusive to LBCI: U.S. State Department's Wooster Stresses Lebanon Must Avoid War, Sees Renewed Push for Two-State Solution
0
Lebanon News
2023-10-18
Protests Erupt near US Embassy in Awkar Against Israeli Attacks on Al-Maamadani Hospital in Gaza
Lebanon News
2023-10-18
Protests Erupt near US Embassy in Awkar Against Israeli Attacks on Al-Maamadani Hospital in Gaza
0
Lebanon News
2023-10-05
ATFL's Ambassador Edward Gabriel on Navigating Through Economic, Political, and Refugee Crises
Lebanon News
2023-10-05
ATFL's Ambassador Edward Gabriel on Navigating Through Economic, Political, and Refugee Crises
0
Sports News
2023-08-31
Amir Saoud Powers Lebanon to Victory Over Cote d'Ivoire: A Deep Dive Into The Numbers
Sports News
2023-08-31
Amir Saoud Powers Lebanon to Victory Over Cote d'Ivoire: A Deep Dive Into The Numbers
0
Sports News
2023-08-29
France Edges Past Lebanon in a Nail-Biter at FIBA World Cup 2023: A Statistical Deep Dive
Sports News
2023-08-29
France Edges Past Lebanon in a Nail-Biter at FIBA World Cup 2023: A Statistical Deep Dive
0
Lebanon News
2019-02-28
Pierre el-Daher, the man who defeated the Lebanese Forces
Lebanon News
2019-02-28
Pierre el-Daher, the man who defeated the Lebanese Forces
Most read
d-none hideMe
24 hours
7 days
Month
1
Lebanon News
00:18
Phosphorus shelling hit outskirts of Khiam, southern Lebanon
Lebanon News
00:18
Phosphorus shelling hit outskirts of Khiam, southern Lebanon
2
Lebanon Economy
08:30
BDL initiates measures to promote electronic payments and reduce cash use
Lebanon Economy
08:30
BDL initiates measures to promote electronic payments and reduce cash use
3
Lebanon News
07:48
Video: LBCI's 'Marhaba Dawle' producer hands over props following legal battle
Lebanon News
07:48
Video: LBCI's 'Marhaba Dawle' producer hands over props following legal battle
4
Middle East News
00:56
Israel considered 'swift' retaliatory strikes against Iran: Reports
Middle East News
00:56
Israel considered 'swift' retaliatory strikes against Iran: Reports
5
Middle East News
07:20
Lufthansa extends suspension of flights to Tehran and Beirut until April 30: AFP
Middle East News
07:20
Lufthansa extends suspension of flights to Tehran and Beirut until April 30: AFP
6
Lebanon News
09:35
Élysée Palace: Macron to receive Lebanese Prime Minister and Army Commander on Friday
Lebanon News
09:35
Élysée Palace: Macron to receive Lebanese Prime Minister and Army Commander on Friday
7
News Bulletin Reports
12:08
US-Israel Agreement: Rafah Invasion Planned, Limited Response to Iran
News Bulletin Reports
12:08
US-Israel Agreement: Rafah Invasion Planned, Limited Response to Iran
8
Lebanon News
06:06
UNIFIL spokesperson affirms: Peacekeeping operations and civilian staff continue duties
Lebanon News
06:06
UNIFIL spokesperson affirms: Peacekeeping operations and civilian staff continue duties
Download now the LBCI mobile app
To see the latest news, the latest daily programs in Lebanon and the world
Google Play
App Store
We use
cookies
We use
cookies
to make
your experience on this
website better.
Accept
Learn More