Lebanese Deputy Prime Minister said that the state cannot save all depositors who lost funds in the crisis. Saade Chami, the Lebanese Deputy Prime Minister, said in a statement on Monday that the government’s plan to revive an economy that has been crushed by the 3-year financial crisis cannot fully repay all depositors.
As it is known, Saade Chami is the architect behind a rescue roadmap adopted by the Lebanese cabinet in May, which covers the necessary measures to unlock the aid funds provided through the International Monetary Fund.
3 Billion Dollar Fund
The $3 billion fund is tackling one of the local Lebanese pound’s worst financial collapses in nearly a century. More than 80 percent of the Lebanese population is below the poverty line, while the local Lebanese pound has depreciated by over 95 percent.
Speaking to local broadcaster LBCI, Saade Chami said that the government’s plan to close the $72 billion hole in the financial system will save all depositors.
He also stated that accounts over $100,000 will be returned without further details, through the fund financed by the assets of the central bank and commercial banks.
He also added that total foreign exchange reserves, including Saade Chami gold deposits, are between $25 and $30 billion at best. As it is known, the control of the foreign exchange position of the Central Bank, including the gold reserves, is among the conditions set by the IMF for access to the $3 billion aid funds.
The banking secrecy law has recently been amended, although observers suspect the IMF has reservations. Also, the 2022 budget has made progress. Saade Chami also said that most banks will not have problems repaying or restructuring depositors.
Observers fear that the government will not have the constitutional legitimacy to sign a final agreement with the IMF
Alongside the financial collapse, Lebanon is also facing a political crisis, with parliamentarians divided over his successor, with Michael Aoun’s term ending in a week.
With the cabinet currently holding a temporary mandate, observers fear that the government will not have the constitutional legitimacy to conclude a final agreement with the IMF. Saade Chami also noted that Lebanon’s progress could continue to be submitted to the IMF board for review and approval of aid funds. But he also said he wasn’t sure whether the final deal with the fund would require presidential approval.