IMF: Lebanon to Receive $860 Mln in SDRs Reserves

The International Monetary Fund (IMF) announced that Lebanon will receive $860 million in reserves of SDRs (Special Drawing Rights), but it is important to use them wisely.

The IMF's Chief Kristalina Georgieva believes, according to “Reuters” that … Reserves for SDR will not solve Lebanon’s long-term structural problems and the government must have the power to fix the faltering economy.

In a donor conference to commemorate a massive explosion in the Beirut port that worsened Lebanon’s faltering economy, Georgieva said the new Lebanese SDRs, which are expected to be released on 23 August, “should be awarded for the maximum. Benefit of the country and its people “.

“But the SDR will not solve Lebanon’s long-term structural and systemic problems … What does it take? We need a government that has the power to reform and revive Lebanon’s faltering economy,” he added.

The executive director of the IMF, Mahmoud Mohieldin, said in an interview with Al-Arabiya last month that the International Monetary Fund recently allocated an amount of about $650 billion in special drawing rights, i.e. international money issued by the Fund to member states. There are 190 countries, and each country’s share is 95% of its stake in the Fund.

The Executive Director of the Fund added that the actual movement of the disbursement of these funds has been agreed onto the Board of Directors of the Monetary Fund, and they will be liquid funds at central banks that can be automatically converted in hard currencies and will be owned by central banks upon receipt.

Mohieldin explained that central banks can convert these funds in free currencies that are automatically added to banks’ foreign reserves, and all countries get them without exception, by the end of August or the beginning of September 2021.

Mohieldin said that the Lebanese issue is a very special deal, and 95% of the share, which is mainly SDR units denominated in dollars, will translate the changing exchange rates, and is not a loan, grant or reward for performance, but rather a fixed share in the fund governed by 95% of the state share in the fund, and its value varies is based on the exchange rate at the time of its receipt, and some estimates indicate it is worth $850 million.

The executive director of the Fund said that the International Monetary Fund is not negotiating any kind of reform program with Lebanon, because the Fund cannot deal with a political vacuum, a provisional government or a provisional government, and there is only technical cooperation with Lebanon because it is a member of the Fund.

Mohieldin explained that his interviews in Lebanon fall within the framework of his capacity as representative of Lebanon and the Arab countries in the IMF and to be able to defend the interests of those countries, continuing: “I had the desire to meet all officials, the head of state, the head of the government interim, the prime minister designate, the central governor and the ministers concerned with the file “Economic and those meetings dealt with two points. The first is that there is no program without a full and complete government, as well as Lebanon’s share in this financing.