IMF: Lebanese Currency Lost 98% of Its Value in Four Years

The International Monetary Fund (IM, F) said that the financial crisis in Lebanon had been exacerbated by special interests that prevented the implementation of necessary reforms.

The fund warns that failure to act to resolve this will push the country to an "unknown fate."

It added over a report released today, Friday, that the economic collapse that began about four years ago cost the local currency about 98 percent of its value, led to a 40 percent contraction of gross domestic product (GDP), pushed inflation to unprecedented rates, and drained two-thirds of the central bank's foreign currency reserves.

These figures came as part of a report by the fund at the conclusion of the Article IV consultations, which is a comprehensive assessment of the financial situation in Lebanon.

The IMF stressed the crisis was exacerbated by the failure to make much-needed policy moves, hampered by the ongoing political crisis and the resistance to reform implementation due to vested interests.