Home Economy Hezbollah opposes IMF management amid Lebanon’s crisis

Hezbollah opposes IMF management amid Lebanon’s crisis

Facing a huge public debt burden and a liquidity crunch, the government on Tuesday appointed international investment firm Lazard and law firm Cleary Gottlieb Steen & Hamilton LLP as its financial and legal advisers on a widely expected sovereign debt restructuring.

Beirut has sought IMF – International Monetary Fund – technical but not financial aid.

Hezbollah is against allowing the International Monetary Fund to manage Lebanon’s financial crisis, the powerful group said on Tuesday, indicating opposition to any IMF bailout that would impose tough conditions on the heavily indebted country.

An IMF technical team visited Beirut from Feb. 20-24. “The discussions on the challenges and the authorities plan to address them were very informative and productive,” IMF spokesman Gerry Rice said.

The crisis came to a head last year as capital inflows slowed and protests erupted against the ruling elite over corruption and bad governance – root causes of the crisis.

Banks are imposing tight restrictions on access to deposits and transfers. The Lebanese pound has slumped: dollars were being offered at 2,470 pounds on Tuesday, a dealer said. The official rate is 1,507.5.

“Hezbollah is very adamantly opposed to the IMF and that makes it very, very difficult and means Lebanon will have to get to a point where the situation is bad for longer,” said Steffen Reichold, portfolio manager at Stone Harbor Investment Partners, which holds some Lebanese Eurobonds.

“That could mean the exchange rate getting to 3,000 and significantly more inflation.”

French Finance Minister Bruno Le Maire said on Monday his government was looking at options to help Lebanon recover, including an IMF programme if Beirut seeks one.