Lebanon Asks IMF for Help in Restructuring Debt / Lebanon's Financial Dilemma

[SoFP1]

Le Liban va officiellement demander l'aide du FMI pour restructurer sa dette publique, annonce une source gouvernementale

Le Liban va officiellement demander l'aide du FMI pour restructurer sa dette publique, annonce une source gouvernementale

Le logo du Fonds monétaire international. Photo d'illustration REUTERS/Yuri Gripas

Reuters
12/02/2020

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Le Liban va demander au Fonds monétaire internationale (FMI) une assistance technique pour dessiner un plan de stabilisation dans le cadre de la crise économique et financière qui sévit au Liban, a indiqué une source gouvernementale à Reuters mercredi. Ce plan comprendra une partie sur les moyens de restructurer la dette publique, a précisé cette source.
Cette demande d’assistance officielle va être bientôt envoyée, a encore déclaré la source. « Il y a eu des contacts avec le FMI mais le Liban va envoyer une demande officielle dans les heures à venir ».

Les autorités libanaises espèrent être conseillées par le FMI sur l'opportunité d'honorer ou non le paiement de 1,2 milliard d'eurobonds arrivant à échéance le 9 mars prochain, a-t-elle ajouté.

 

[Thawra # Furoshima]

That is a technical issue to monitor the non payment of debts

 

[Mrsrx]

From he article it seems that the source is the lebanese government and not the FMI yet.
So they are going to ask for help in restructuring meaning (speculating) the government already talked to the lenders which the biggest are the lebanese banks and they did not come to an agreement.

 

[TayyarBeino]

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  12:01

  
  مصدر حكومي لـ"سكاي نيوز": لبنان سيطلب رسميا من صندوق النقد الدولي المساعدة في إعادة هيكلة الدين العام وحل الأزمة المالية
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  11:52

  
  بيان لجمعية المصارف .. ماذا جاء فيه؟ تتمة

 

[VH Redux]

whats the fate of the lira ya3ne?

 

[SoFP1]

Beirut Stock Exchange closed for today. Market crash expected it seems after restructuring

whats the fate of the lira ya3ne?

With IMF, devaluation for sure!

 

[Thawra # Furoshima]

Beirut Stock Exchange closed for today. Market crash expected it seems after restructuring

With IMF, devaluation for sure!

The devaluation already happened

 

[SoFP1]

The devaluation already happened

Officially I mean, rate at banks.

 

[JB81]

One of the major cons for the IMF financial restructuring, it is the privatization of the public sector.

 

[VH Redux]

Beirut Stock Exchange closed for today. Market crash expected it seems after restructuring

With IMF, devaluation for sure!

excuse my financial ignorance but if most of the debt is local cant we settle it with the local banks with a haircut?

 

[Mrsrx]

One of the major cons for the IMF financial restructuring, it is the privatization of the public sector.

i agree generally with the notion that the public sector needs to be managed in a non profit matter and it is better to keep strategic production/services under the state.
That said....Lebanon mismanages every single company it owns and they are run for profit and not state profit but corrupt politicians have their hands on them and are sucking them dry and blocking any investment. The private sector (especially if there is no monopoly) can bring in investment and better the services while stopping gov. subsidies in order to keep the lights on (literally).

So EDL ....good bye and hope to never see you again ...

 

[SoFP1]

excuse my financial ignorance but if most of the debt is local cant we settle it with the local banks with a haircut?

We don't have enough to pay even the foreign part.

 

[Mrsrx]

excuse my financial ignorance but if most of the debt is local cant we settle it with the local banks with a haircut?

Here is the magic loop

Government owes money to the lebanese banks
Banks owe you money

Banks gave your money to the lebanese government in debts
Lebanese govt cannot pay they debt back to the banks
banks cannot pay your money back

If the banks fail there is no one to give the state cash anymore for regular spending as we lose money every year so the govt depends on them
if the gov fails they will not pay the banksthe money they owe them so the banks will fail

In short
Banks fail --> gov fail
gov fail --> banks fail

The last part of the equation is your money in the bank...well if they decide together guess what will happen to that.

 

[VH Redux]

We don't have enough to pay even the foreign part.

but wouldnt a haircut take a chunk of money from depositors or thats not nearly enough?

 

[VH Redux]

how much will the lira devaluate to?

i have a small amount of money in lira should i convert it now to usd at the serrafin abel ma tofrot w o5sar most of their value?

 

[VH Redux]

i agree generally with the notion that the public sector needs to be managed in a non profit matter and it is better to keep strategic production/services under the state.
That said....Lebanon mismanages every single company it owns and they are run for profit and not state profit but corrupt politicians have their hands on them and are sucking them dry and blocking any investment. The private sector (especially if there is no monopoly) can bring in investment and better the services while stopping gov. subsidies in order to keep the lights on (literally).

So EDL ....good bye and hope to never see you again ...

if they get privatized that means they can lay off the unnecessary people that were crammed in by the politicians

 

[Mrsrx]

but wouldnt a haircut take a chunk of money from depositors or thats not nearly enough?

what i described in the loop i left a few parts out
Money coming in from diaspora and Money spent on "3ajez" which is not offset by the diaspora

so this loop is running every year with money leaking out in"3ajez"...problem is too much money leaked out for it to be an easy haircut they lent the real money you put in and kept the fact that they owe you that money but does not mean they have it


its basically you giving me 300 000$ i spend it on strippers and cocaine but i still tell you i owe you 300 000$ and I owe aswell my bank for the house i bought 200 000$
removing your 300 000$ and stop promising you that does not mean i will be able to pay the bank

(way more complex than that and the haircut could be a solution because deposits are still there partially but its basically stealing from you for 20 more years to continue to pay my banks interest and not even the loan)
we have structural problems and a haircut only treats the symptoms

 

[Iron Maiden]

what i described in the loop i left a few parts out
Money coming in from diaspora and Money spent on "3ajez" which is not offset by the diaspora

so this loop is running every year with money leaking out in"3ajez"...problem is too much money leaked out for it to be an easy haircut they lent the real money you put in and kept the fact that they owe you that money but does not mean they have it


its basically you giving me 300 000$ i spend it on strippers and cocaine but i still tell you i owe you 300 000$ and I owe aswell my bank for the house i bought 200 000$
removing your 300 000$ and stop promising you that does not mean i will be able to pay the bank

(way more complex than that and the haircut could be a solution because deposits are still there partially but its basically stealing from you for 20 more years to continue to pay my banks interest and not even the loan)
we have structural problems and a haircut only treats the symptoms

thats a big prostitues and cocaine budget m8, u may want take a step back..

 

[VH Redux]

thats a big prostitues and cocaine budget m8, u may want take a step back..

still a newbie compared to saad tho

 

[Mrsrx]

thats a big prostitues and cocaine budget m8, u may want take a step back..

There is no such thing as a big bugdet when it is this important!