Salameh to Attend 2nd Round of IMF Talks amid Lebanese Rift

Central Bank Governor Riad Salameh will personally participate in the second round of remote negotiations with the International Monetary Fund on Monday, after he opted not to take part in the first round and to delegate representatives instead.

“Salameh's participation will not signal the end of the divergence in the viewpoints of the government and the central bank, but rather the opposite,” al-Joumhouria newspaper reported on Monday.

According to information obtained by the daily, Salameh will be keen to declare his viewpoint, which contradicts with the content of the government's financial rescue plan as to the estimation of the central bank's losses.

“He will propose the solutions that he believes are more appropriate for addressing what the plan calls a 'financial gap,'” al-Joumhouria said.

“He will tell the IMF negotiators what he considers to be a more befitting rescue approach as to the issue of restructuring the central bank,” it added.

The newspaper also reported that a meeting will be held between Finance Ministry and central bank officials prior to the talks with the IMF.

“That does not mean that there will be attempts to reconcile points of view and the meeting will rather be dedicated to exchanging ideas and clarifying some issues,” it added.

The first round of negotiations between Lebanon and the IMF was held on Wednesday. Finance Minister Ghazi Wazni expressed his relief over the talks and expected the next rounds to be “equally constructive.”

The global body for its part said the negotiations aim to reach "a comprehensive framework that can help Lebanon address the current challenging economic and social conditions and restore sustainability and growth."

Under the rescue plan, the government will seek more than $10 billion in financial support on top of $11 billion in grants and loans already pledged by international donors in 2018.

The rescue plan aims to reduce the deficit, restructure a colossal debt, and reorganize an oversized banking sector.

Lebanon is one of the most indebted countries worldwide with a debt equivalent to 170 percent of its gross domestic product. It defaulted on a repayment for the first time ever in March.

The country is also in the grips of a severe liquidity crunch, with depositors unable to make transfers abroad or withdraw dollars.