Lebanon and the International Monetary Fund have reached a tentative agreement on a $3 billion loan facility, a major step forward from the economic and financial crisis. crisis This has crippled the country since 2019.

Two years after the crisis, the country’s currency has lost more than 90 percent of its value, and nearly three-quarters of the population live below the poverty line, according to the United Nations.

The long-awaited rescue package announced on Thursday is crucial to stemming a further collapse in the economy, but talks between the IMF and Lebanese authorities have repeatedly stalled over economic reforms demanded by donors.

“this [Extended Fund Arrangement] Designed to support the authorities’ reform strategy to restore growth and financial sustainability, strengthen governance and transparency, and increase social and reconstruction spending,” the IMF said in a statement on Thursday.

Announcing the deal, Lebanese Prime Minister Najib Mikati said after a meeting in Beirut with IMF representatives that his government had committed to the fund that it would implement broad reforms.

The crisis requires a “comprehensive reform plan” to achieve “financial and economic stability and . . . durable and strong growth,” he said.

“This crisis has shown that years of unsustainable macroeconomic policies have fueled large twin deficits (fiscal and external), supported an overvalued exchange rate and an oversized financial sector, compounded by severe accountability and transparency issues and lack of structural reforms.”

The fund arrangement will be extended for 46 months, enabling Lebanon to receive the equivalent of $3 billion in special drawing rights. Full approval by the IMF board depends on Lebanon implementing a series of measures.

These included a restructuring strategy for the banking sector to limit the impact on small depositors and “recourse to public resources”; parliamentary approval of a bank restructuring law; and an external assessment of the 14 largest banks by a “well-known international firm”.

The agreement also calls for reforms to decades-old bank secrecy laws “to bring them into line with international standards in the fight against corruption”; completion of an audit of the central bank; parliamentary approval of the 2022 budget; Lebanon, which has been in place since the crisis began The various official and black market exchange rates for the pound are unified.

Observers said the announcement was the first sign that the Lebanese government was taking seriously the need to deal with the crisis. General elections in the country are still weeks away.

But analysts have warned that the road to full IMF approval looks arduous given the Lebanese political establishment’s previous reluctance to implement reforms.