Lebanese PM signals difficulty in agreeing financial plan

Lebanese Prime Minister Najib Mikati indicated on Thursday difficulties in agreeing a financial recovery plan for addressing the country’s economic collapse, calling it a “difficult process.”

A plan for addressing a $70 billion hole in the financial system is seen as the starting point for talks with the International Monetary Fund and vital to reviving the paralyzed banking system.

“The economic recovery plan is not easy… we think it is a difficult process, a Kamikaze operation,” Mikati said in a televised news conference after the cabinet approved the 2022 state budget.

The Lebanese pound has slumped by more than 90 percent since the financial crisis erupted in late 2019.

Though the government has yet to formally cancel the old pegged exchange rate of 1,500 pounds to the dollar, the new budget applies a rate much closer to the market value for customs transactions of around 20,000.

The budget projects spending at 47 trillion pounds with a deficit of around seven trillion pounds, Mikati added, equal to around $330 million at the parallel market rate on Thursday.

It still requires the approval of parliament.

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