Lebanon's Advisers to Work on Compromise on Financial Plan

Demonstrators shout slogans during ongoing anti-government protests at a highway in Jal el-Dib, Lebanon, October 24, 2019. REUTERS/Alkis Konstantinidis
Demonstrators shout slogans during ongoing anti-government protests at a highway in Jal el-Dib, Lebanon, October 24, 2019. REUTERS/Alkis Konstantinidis
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Lebanon's Advisers to Work on Compromise on Financial Plan

Demonstrators shout slogans during ongoing anti-government protests at a highway in Jal el-Dib, Lebanon, October 24, 2019. REUTERS/Alkis Konstantinidis
Demonstrators shout slogans during ongoing anti-government protests at a highway in Jal el-Dib, Lebanon, October 24, 2019. REUTERS/Alkis Konstantinidis

Lebanon's financial adviser Lazard will see if a government financial rescue plan can be adjusted to reach a compromise workable for the International Monetary Fund, two sources said on Friday, after the plan hit resistance from politicians, banks and the central bank.

The plan, which anticipates vast losses in the financial system, has been undermined by objections from Lebanon's ruling elite, obstructing IMF talks aimed at rescuing the country from a financial meltdown.

Prime Minister Hassan Diab's government had approved the plan, which would lead to losses of 241 trillion Lebanese pounds in the financial system, or $68.9 billion at the exchange rate applied by the plan, as the basis for talks with the IMF.

The IMF said the losses appeared to be about the right order of magnitude.

But a parliamentary fact-finding committee, backed by all Lebanon's main parties, objected to the approach taken in the plan. Applying different assumptions, it came up with losses between a quarter and half that amount.

"Lazard will come possibly next week to see if they can adjust the government plan and work on a compromise acceptable to the IMF. They will do any adjustment based on the government plan," one of the sources told Reuters.

The second source said the aim of the Lazard visit is "how we can try to adjust the government plan to see if we can come up with something workable for the IMF and for the Lebanese counterparts.”

Lazard declined to comment.

Lebanon's legal adviser, Cleary Gottlieb Steen & Hamilton LLP, is also visiting the country, the sources said.

The IMF warned Lebanon on Monday that attempts to lower losses from the financial crisis could only delay recovery.

Alain Bifani, a senior member of Lebanon's negotiating team with the IMF, resigned as finance ministry director general last month, saying vested interests were undermining the government plan.



Gold Extends Gains as Trump Tariffs Fuel Safe Haven Flows

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
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Gold Extends Gains as Trump Tariffs Fuel Safe Haven Flows

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold prices rose for a second straight session on Tuesday, but traded below the recent all-time highs, as uncertainty around US President Donald Trump's tariff plans continued to fuel economic growth concerns and safe haven flows into bullion.

Spot gold gained 0.6% at $2,913.79 an ounce as of 0714 GMT. It hit a record high of $2,942.70 last week.

US gold futures added 0.9% to $2,925.50.

"Trump's disruptive modus operandi, aggressive rhetoric and tariffs - whether actual or threatened - could unravel global trade and intricate supply chains," said Nikos Tzabouras, senior financial writer at trading platform Tradu, Reuters reported.

"With uncertainty surrounding the global economy and the broader geopolitical landscape in the Trump 2.0 era, gold is set to remain a natural beneficiary of risk-off flows and central bank buying."

Since taking office last month, Trump has swiftly redrawn the global trade battlefield with a series of tariffs, while plans are already in motion for sweeping reciprocal tariffs, aimed squarely at any nation that taxes US products.

"Gold continues to benefit from the uncertainty surrounding the US. government's tariff policy. Central bank buying should also continue to provide support, even if there is no new data on this," Commerzbank analysts said in a note.

The market's focus has now shifted to the US Federal Reserve's January meeting minutes due on Wednesday for clues into the central bank's interest rate trajectory.

"Price gains are also supported by growing expectations that the Fed will cut rates in 2025 - a sentiment that gained further traction among traders after last week's disappointing US retail sales figures," Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, said.

Bullion benefits from geopolitical and economic uncertainties, as well as rising price pressures, but higher interest rates diminish the asset's allure.

Spot silver fell 0.9% to $32.50 an ounce. Platinum jumped 0.9% to $985.20 and palladium climbed 1.6% to $978.00.