Lebanon brings in turnaround specialist Alvarez & Marsal as economic crisis deepens
Ministers agreed on KPMG and Oliver Wyman for a financial audit
Beirut — Lebanon's government agreed on Tuesday to hire turnaround specialist Alvarez & Marsal to lead a forensic investigation at the central bank as it grapples with a financial meltdown.
Prime Minister Hassan Diab told the cabinet the investigation would “represent a drastic transformation on the path to uncovering what happened at the financial level in terms of waste and theft”.
Ministers also agreed on KPMG and Oliver Wyman for a financial audit, the presidential palace said after the cabinet met there.
Lebanon's financial crisis has slashed the value of its currency since late in 2019 and sent inflation soaring as already critical foreign reserves dwindle. Savers have been frozen out of their dollar deposits as the greenback grows scarce.
The Lebanese pound has lost more than 60% of its value in the past month, and 80% of its value since October.
Most parts of the country receive a few hours of electricity a day and there are shortages of bread and some essential medicines. Some economists have predicted an economic collapse similar to Venezuela's, reports said.
International Moentery Fund (IMF) talks over a $10bn loan have been bogged down by a row over the scale of financial losses that have embroiled the government, the central bank, commercial banks and MPs from the dominant political parties.
After the state defaulted on its hefty foreign currency debt and launched restructuring talks with creditors in March, Diab said there would be an audit of the central bank's accounts in a bid to show transparency.
In an attack on central bank governor Riad Salameh's performance in April, Diab cast him as responsible for the currency crash, mounting losses in the banking sector and lack of transparency.
Salameh defended the central bank's practices and said it did not hide information. He has deflected the blame back towards successive Lebanese governments for failing to enact reforms or sort out public finances.
Reuters, with staff writer
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.