Daily Memo: IMF Warnings, Japanese Defenses

Lebanon's central bank has reportedly accumulated $49 billion in losses.

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Lebanon’s economic woes. The International Monetary Fund has warned that Lebanon’s central bank has accumulated $49 billion in losses due to defaults on bond holdings and the falling value of the country’s currency. The country appears headed toward hyperinflation; in some areas of Lebanon, the Lebanese currency is now trading at 7,000 lira to the dollar. (Officially, the lira is pegged at 1,507.5 to the dollar and has lost over 75 percent of its value since October.) Some people are trying to use this as an opportunity to turn a profit by selling newly purchased dollars at the higher exchange rate at currency shops. On Wednesday, the Lebanese parliament began reviewing steps to declare a financial state of emergency to protect the lira. Parliamentary speaker Nabih Berri warned that Lebanon wouldn’t receive “one penny” in aid from outside actors if it didn’t implement serious political and economic reforms. U.S. Secretary of State Mike Pompeo echoed that sentiment on Thursday, saying the U.S. was prepared to offer its support on the condition that Lebanon carries out national reforms. The U.S. also indicated that the IMF would provide assistance only if Lebanon enacted internal reforms. Tokyo reconsiders its defense systems. Japan is […]

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