Connect with us


Lebanon has yet to give IMF figure for financial losses, central bank governor says

Lebanon has yet to give the IMF its estimate of losses in the financial system as discussions on the issue continue, but is working hard to sign a memorandum of understanding with the Fund by year-end, governor Riad Salameh told Reuters on Tuesday.

Disagreements in Lebanon over the size of the losses and how they should be distributed torpedoed IMF talks last year. The central bank, banks and political elite rejected figures set out in a government plan that was endorsed by the IMF at the time.

The issue has obstructed attempts to chart a way out of the crisis that has devastated Lebanon since 2019, sinking the currency by more than 90 percent, causing poverty to skyrocket and leading many Lebanese to emigrate.

For the latest headlines, follow our Google News channel online or via the app.

Speaking in an interview for the upcoming Reuters Next conference, Salameh also said the bank had $14 billion of available liquidity in its reserves, and reiterated denials of wrongdoing as judicial authorities in France and Switzerland investigate money laundering allegations against him.

Salameh said an IMF program was essential for Lebanon to exit the crisis, noting the external financing it would unlock and discipline that would impose reforms.

Therefore the central bank would accept the figures for the losses as decided by the government, he said.

“We are, at this stage, still in the process of gathering the data that is requested by the IMF and the issue of the losses – the number of these losses – are not going to be a hurdle for these negotiations, at least from the side of the central bank,” he said.

Asked whether there was agreement yet on who will bear the burden of the losses – such as depositors, bank shareholders, the government and the central bank itself – Salameh said no decision had been taken “because we don't have yet the final figures that are agreed with the IMF for the total losses”.

Last year, several sources said Salameh dug in his heels over the losses which the previous government's plan suggested were in the $90 billion range. Ruling parties and commercial banks also objected to the figures, saying they were too big.

Asked when the figure would be ready, Salameh said Prime Minister Najib Mikati had set a deadline for signing the IMF memorandum of understanding by the end of 2021, which the government and central bank were working “very hard to achieve”.

Funding needs

Salameh became Banque du Liban (BDL) governor in 1993 and managed a pegged exchange rate that underpinned the import-dependent economy from 1997 until the meltdown.

As Lebanon's currency sunk, the reserves were depleted as BDL provided dollars at heavily subsidized exchange rates to finance imports including fuel, food and medicine.

Salameh noted that this policy had now been largely phased out – the only imports for which dollars are being provided at subsidized rates today are medicines for some chronic illnesses and wheat, while BDL sells dollars for gasoline imports at a small discount to the market exchange rate.

“Our expectation is that if we stay on this model, for the next 12 months … the BDL will have to fund $2.5 billion,” he said. BDL might recoup $300-$500 million from its foreign exchange platform, Sayrafa, in that timeframe, he said.

The reserves were recently boosted by the sale of over $1 billion of IMF Special Drawing Rights.

Salameh is being investigated by authorities in four European countries, including the Swiss inquiry over alleged “aggravated money laundering” at BDL involving $300 million in gains by a company owned by his brother, Raja Salameh.

Last week, he said he had ordered an audit of transactions and investments that had been the focus of media reports and this had shown no public funds were used to pay fees and commissions to the company owned by his brother. Raja Salameh has not publicly commented on the accusation.

Salameh gave the prime minister a copy of the audit last week but declined to provide Reuters with one. “In this report, it is clear that there was no embezzlement or money laundering on my side or under my guidance at the central bank,” he said.

Read more:

As Lebanon’s economy unravels, US dollar bills and connections pay off

Lebanon eyes IMF progress despite new turmoil: Economy minister

Lebanese pound back in freefall after brief recovery

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


China’s home-grown, narrow-body C919 completes first commercial passenger flight

China Eastern Airlines Corp Ltd entered China’s home-grown narrow-body C919 jet into passenger service on Sunday and completed its first commercial flight, marking a milestone in the country’s effort to become more self-reliant.
The C919 is the product of state-backed Commercial Aviation Corp of China (COMAC) which began developing the jet 15 years ago to rival Airbus SE’s A320neo and Boeing Co’s 737 MAX single-aisle jet families.

For the latest headlines, follow our Google News channel online or via the app.

President Xi Jinping has hailed the project as a triumph of Chinese innovation, while on Sunday state media trumpeted the plane as a symbol of industrial prowess and national pride.
“After generations of endeavor, we finally broke the West’s aviation monopoly and rid ourselves of the humiliation of ‘800 million shirts for one Boeing’,” Beijing Daily wrote, referring to the early years of economic reform around 40 years ago when China manufactured mainly low-value goods.
The C919 took off at 10:32 a.m. (0232 GMT) from Shanghai Hongqiao International Airport where COMAC and China Eastern Airlines are headquartered, and landed two hours later at Beijing Capital Airport, showed flight tracker app Variflight.
“I’m confident about the plane. The flight was smoother than ex-pected,” one of about 130 passengers told state broadcaster CCTV as he disembarked.
The plane is scheduled to return to Shanghai on Sunday, then make a longer two-way flight to the southwestern city of Chengdu on Monday.
Lv Boyuan, a 21-year-old student and aviation enthusiast, was at Shanghai’s airport on Sunday to fly to Chengdu from where he planned to return on the C919 the following day.
“I’ve been really looking forward to its flight, especially because it’s a new-generation aircraft, unlike Boeing and Airbus equiva-lents which have been around for a number of years now,” said Lv.
The C919 made its first flight in 2017 after years of delays and has undergone numerous test flights since.
State-backed China Eastern Airlines ordered five of the jets in March 2021. It took delivery of the first in December and has said it expects to receive the remainder this year.
In total, COMAC had won 1,035 orders from 32 customers as at 2022-end. A company official has since told media the figure exceeds 1,200.
The planemaker expects annual production to reach 150 C919 jets within five years, domestic media reported in January.
Though assembled in China, the C919 relies heavily on Western components, including engines and avionics, from firms including General Electric Co, Safran SA, and Honeywell International Inc.
Li Hanming, an independent expert on Chinese aviation, said most C919 orders were letters of intent from domestic customers. Its few foreign customers include lessor GE Capital Aviation Services Ltd.
“For the C919, the domestic market is big enough,” Li said.
The international market is questionable given that neither European nor US regulators have certificated the aircraft, said Greg Waldron, Asia managing editor of industry publication FlightGlobal.
“Until this happens, key international markets will be closed to the C919,” he said.
The C919’s predecessor, the ARJ21, is a short-haul 90-seat aircraft that entered commercial operation in 2016 and is flown by major Chinese airlines as well as Indonesia’s TransNusa.
The ARJ21’s use in Indonesia indicates the C919’s international future lies mainly in the developing world, Waldron said.
COMAC is also developing a CR929 wide-body jet in collaboration with Russia.

Read more: Airbus signs multi-billion dollar deal with China for order of 300 aircraft

Continue Reading


JPMorgan names Omar Fichtali as new investment banking head in Saudi Arabia: Report

JPMorgan Chase & Co. has appointed Omar El Amine Fichtali as head of investment banking in Saudi Arabia, according to an internal memo seen by Bloomberg News.

The move comes weeks after one of the lender’s top bankers in the kingdom, Fahad al-Deweesh, left to join Citigroup Inc. as competition for banking talent in the region’s biggest economy heats up.

For all the latest headlines follow our Google News channel online or via the app.

El Amine Fichtali joined JPMorgan’s London office in 2007 with a focus on technology, media and telecommunications investment banking and has worked in various roles with the Middle East and North Africa investment banking team in Dubai and Riyadh.

He will work closely with Bader Alamoudi, senior country officer for Saudi Arabia, and Khalid Fayez, head of corporate banking for JPMorgan in the Kingdom.

A spokeswoman for the bank confirmed the contents of the memo.

Saudi Arabia is becoming an increasingly important market for global banks as the Kingdom embarks on a plan to diversify its economy away from oil by selling stakes in state-owned companies and investing in new industries.

Even as the global financial community contends with layoffs and lower bonuses, banking jobs remain plentiful in the kingdom and salaries are surging.

Wealth funds such as the Public Investment Fund are also actively recruiting.

JPMorgan is working on Saudi Arabia’s biggest initial public offering of the year so far, the $336 million float of generic drugmaker Jamjoom Pharmaceuticals Factory Co.

Read more:

JPMorgan accuses US Virgin Islands of hiding Jeffrey Epstein for two decades

US bank JPMorgan Chase to spend $200 mln on carbon dioxide removals

Saudi wealth fund PIF hires staff in New York from Goldman Sachs, Point72

Continue Reading


China industrial profits slide as weak demand weighs on economy

Profits at industrial firms in China kept falling in the first four months of the year, underlining cooling demand and deepening factory-gate deflation in the world’s second-largest economy.

Industrial profits fell 20.6 percent in the January-April period from the same time frame in 2022, data published Saturday by the National Bureau of Statistics showed.

For all the latest headlines follow our Google News channel online or via the app.

The drop was slower than a decline of 21.4 percent logged in the first quarter.

Profits for the single month of April were up 3.7 percent from a year earlier, according to NBS figures. That compared with March’s decline of 19.2 percent.

“The weak recovery of effective demand has continued to weigh on the capacity utilization rate, which, coupled with the difficulty to bring down costs, means more patience is needed for the rebound in industrial profit,” said Bruce Pang, chief economist for Greater China at Jones Lang LaSalle Inc. “The year-on-year growth may not return to the positive territory until the fourth quarter.”

More policy support and stimulus are needed for a full-year gain in industrial profit, Pang said.

China’s post-Covid recovery is faltering, recent data has shown, with export growth weakening and industrial deflation worsening in April.

Falling profits bode ill for the economy’s outlook, and are set to weigh on already weak sentiment among businesses — thus holding them back from investing.

Industrial enterprises in China have been struggling to rebound from last year’s Covid-induced slump, even though factory activity has picked up somewhat.

Still, demand for goods remains sluggish, with the economic rebound mainly led by consumer spending in services. Foreign purchases of Chinese products are slowing as the US and other developed economies seek to “de-risk” from China.

Deteriorating producer deflation has also undercut factories’ ability to boost prices, hurting profits. The producer price index fell 3.6 percent on year in April, the biggest decline since May 2020.

Foreign firms registered a 16.2 percent drop in profits in the January-April period, compared with a 24.9 percent decline in the first quarter.

Profits at private firms fell 22.5 percent in the first four months, while those at state-owned enterprises slipped 17.9 percent, according to NBS data.

Read more:

Taiwan says Chinese aircraft carrier sailed through strait

US arrests two China govt. agents who paid bribes to disrupt Falun Gong movement

US, China argue trade issues in rare talks

Continue Reading