IMF-Lebanon Talks Fettered by Disputes With Central Bank

The army said it had arrested 16 people who were carrying out “money transfers and illegal currency exchange transactions, using licensed companies and offices as a front. (File/AFP)
The army said it had arrested 16 people who were carrying out “money transfers and illegal currency exchange transactions, using licensed companies and offices as a front. (File/AFP)
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IMF-Lebanon Talks Fettered by Disputes With Central Bank

The army said it had arrested 16 people who were carrying out “money transfers and illegal currency exchange transactions, using licensed companies and offices as a front. (File/AFP)
The army said it had arrested 16 people who were carrying out “money transfers and illegal currency exchange transactions, using licensed companies and offices as a front. (File/AFP)

The first round of talks between experts from the International Monetary Fund (IMF) and Lebanese officials has unveiled that the public dispute between Prime Minister Hassan Diab and Central Bank Governor Riad Salameh left a bad impression on the international organization, according to observers and businessmen.

The IMF has never witnessed similar divergences between the executive and monetary authorities throughout its cooperation with many countries.

“There are Lebanese qualitative gaps that would negatively affect talks with the qualified international team,” observers said.

Those gaps emanate from the dispute between Diab’s government and Salameh over a government reform plan, proposed two weeks ago to save the country from its grave financial and economic crisis.

During current talks with the IMF, Lebanon seeks $10 billion in loans, in addition to rapid aid of $900 million dollars, according to what Lebanese Finance Minister Ghazi Wazni told Asharq Al-Awsat this week.

The newspaper learned that IMF officials have expanded the specter of their contacts to include current and former Lebanese officials in crucial sectors such as the monetary authority, the banking sector, and some independent experts.

The IMF officials are particularly inquiring about the liberalization of the Lebanese lira exchange rate, in addition to the proposed mechanisms for the restructuring of the Central bank and the banking apparatus.

The financial institution is also testing the State’s seriousness in confronting smuggling via illegal crossings.

Observers noticed that the Lebanese team, headed by Wazni, was not equally convinced of the government’s economic plan.

Salameh announced he would not personally attend talks with the IMF, but delegated a team to represent him. Meanwhile, the Banking Association strongly rejected the government’s plan and said it was currently preparing an alternative, which it would send later to the IMF.

The observers also noticed a downsized representation of the banking sector during talks with the IMF.

They said the government’s attempts to contain the sector were materialized with recent official statements uncovering plans to decrease the number of commercial banks to around half.

Chairman of the Banking Control Commission of Lebanon (BCCL) Samir Hammoud, (whose legal term ended weeks ago) told Asharq Al-Awsat that Lebanon should have a national comprehensive vision to solve the current crisis, including a clear approach on the financial, economic, and banking situation.

“This plan should not seek to cut down from depositors’ accounts, but to work on the continuity of financing the debilitated economy,” Hammoud said.



US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo

US job growth accelerated in September and the unemployment slipped to 4.1%, further reducing the need for the Federal Reserve to maintain large interest rate cuts at its remaining two meetings this year.
Nonfarm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 in August, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday.
Economists polled by Reuters had forecast payrolls rising by 140,000 positions after advancing by a previously reported 142,000 in August.
The initial payrolls count for August has typically been revised higher over the past decade. Estimates for September's job gains ranged from 70,000 to 220,000.
The US labor market slowdown is being driven by tepid hiring against the backdrop of increased labor supply stemming mostly from a rise in immigration. Layoffs have remained low, which is underpinning the economy through solid consumer spending.
Average hourly earnings rose 0.4% after gaining 0.5% in August. Wages increased 4% year-on-year after climbing 3.9% in August.
The US unemployment rate dropped from 4.2% in August. It has jumped from 3.4% in April 2023, in part boosted by the 16-24 age cohort and rise in temporary layoffs during the annual automobile plant shutdowns in July.
The US Federal Reserve's policy setting committee kicked off its policy easing cycle with an unusually large half-percentage-point rate cut last month and Fed Chair Jerome Powell emphasized growing concerns over the health of the labor market.
While the labor market has taken a step back, annual benchmark revisions to national accounts data last week showed the economy in a much better shape than previously estimated, with upgrades to growth, income, savings and corporate profits.
This improved economic backdrop was acknowledged by Powell this week when he pushed back against investors' expectations for another half-percentage-point rate cut in November, saying “this is not a committee that feels like it is in a hurry to cut rates quickly.”
The Fed hiked rates by 525 basis points in 2022 and 2023, and delivered its first rate cut since 2020 last month. Its policy rate is currently set in the 4.75%-5.00% band.
Early on Friday, financial markets saw a roughly 71.5% chance of a quarter-point rate reduction in November, CME's FedWatch tool showed. The odds of a 50 basis points cut were around 28.5%.