Lebanon has reached a staff-level agreement with the IMF worth about $3 billion, subject to approval by IMF management and the executive board, according to a statement released on Thursday.
“The Lebanese authorities and the IMF team have reached a staff-level agreement on comprehensive economic policies that could be supported by a 46-month Extended Fund Arrangement (EFF) with requested access of SDR 2,173.9 million (equivalent to about US$3 billion),” the IMF said.
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The IMF said Lebanon was facing an unprecedented crisis, which led to a “dramatic economic contraction and a large increase in poverty, unemployment, and emigration.”
The statement said the crisis resulted from years of unsustainable macroeconomic policies fueling fiscal and external deficits and support for “an overvalued exchange rate and an oversized financial sector.”
Severe accountability and transparency problems and a lack of structural reforms also led to Lebanon's unprecedented situation.
For his part, Lebanese PM Najib Mikati said the deal would spark interest from foreign donors.
Speaking after the deal was announced, Mikati said the reforms Lebanon vowed to implement were “a visa stamp for donor countries” to re-engage with Lebanon.
“[The reforms will] put Lebanon back on the global finance map,” Mikati told reporters.
Read more: US announces $64 mln in emergency food aid for struggling Lebanon
