|12 February, 2020

Lebanon to request IMF technical help -government source

The official request for technical help would be sent to the IMF soon

A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018.

A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018.

REUTERS/Johannes P. Christo

BEIRUT- Lebanon will ask the International Monetary Fund for technical assistance to draw up a stabilisation plan in the face of a financial and economic crisis, including how to restructure its public debt, a government source told Reuters on Wednesday.

"There has been contact with the IMF but Lebanon will send an official request in the coming hours to have a team dedicated to dealing with technical assistance," the source said.

The new Lebanese government that took office last month faces a liquidity crunch, a falling local currency and soaring inflation, and must also decide what to do about looming sovereign debt maturities including a $1.2 billion Eurobond due in March.

The government source said Lebanon was seeking IMF advice "on whether to pay the Eurobond maturity amid concerns that any reprofiling of Lebanon's debt should be conducted in an orderly way to avoid damaging the country's banking system."

Lebanon's banking association said it was necessary to repay the Eurobond on time to protect depositors and to preserve its place in international financial markets and its relationships with correspondent banks.

In a statement, the association said debt restructuring needed time and help from international institutions and very little time remained before the maturity on March 9, which did not allow for preparation and "competent handling."

Parliament Speaker Nabih Berri was quoted saying on Tuesday that Lebanon should seek IMF help to draw up an emergency plan but not "surrender" itself because the nation could not bear the conditions the Fund would impose.

The comments indicated Lebanon's opposition to a full IMF programme even as it seeks IMF technical help.

(Reporting by Samia Nakhoul and Ellen Francis; Writing by Tom Perry; Editing by Catherine Evans and John Stonestreet)

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