Deputy Prime Minister Saadeh al-Chami: “The state has gone bankrupt as did the Banque du Liban, and the loss has occurred, and we will seek to reduce losses for the people” 

Lebanon has officially declared bankruptcy.

Al-Chami’s statement shocked the country, the region and the international community.

There are growing fears over who will pay for Lebanon’s bankruptcy.

The governor of Lebanon‘s Central Bank Riad Salameh denied that the institution he has led for 30 years was bankrupt.

Lebanon is in its third year of a financial meltdown caused by decades of corruption and mismanagement that have led the Lebanese currency to crash. 

The Lebanese Lira has lost more than 90% of its value preventing people from buying basic goods, such as food and water. 

Widespread power outages are common due to fuel shortages.

Banks have locked most savers out of hard-currency accounts.

A draft government financial rescue plan earlier this year estimated a roughly $70 billion hole in the financial sector.

The World Bank estimates Lebanon’s economy to have contracted by nearly 60% between 2019 and 2021 in what it has called one of the worst financial crises since the mid-1800s.

Lebanon and the International Monetary Fund have reached a provisional agreement, step that could eventually pave the way toward unlocking billions of dollars in loans to Lebanon.