A thread on #SDR and #Lebanon. The #IMF is about to create, almost out of thin air, $650 billion worth of reserves (#SDRs) and will distribute them to all countries. #Lebanon’s share will be approximately $900 million. 1/7
The mechanics are complicated. But at its essence, the allocation is costless and, unlike a traditional #IMF program, will come with no strings attached. Before year’s end, #Lebanon will receive the money which will show up as an increase in BDL’s foreign reserves. 2/7
Aug 3, 2020 • 6 tweets • 3 min read
1/6. Few thoughts on the new phase of the #Lebanon economic crisis. Left to its own devices, the economy is actually adjusting. While the “clean up” is theoretically desirable, the way it is evolving is brutal, sub-optimal, and hurting the wrong segments of the society.
2/6. First, the positives. After years of “living beyond its means”, #Lebanon is adjusting to a more normal size. Best way to see this: The economy’s annual $ gap (i.e., the current account) will shrink from a massive $11.5b in 2019 to a much more manageable $4b in 2020.
Mar 21, 2020 • 6 tweets • 2 min read
Some #EmergingMarkets thoughts. The shock is unprecedented. Q1 GDP likely contracted -15% (annualized). If #China indeed recovers, Q2 headline number may look better. But, X-China, the pain has only just started. 1/6
The nature of the shock is complicated. Domestic factors (lower consumption and investment) is combining with external shocks (collapsing exports; imploding commodity prices; lower remittances; & disappearing tourists). 2/6