The Yale Program on Financial Stability presents a series of blog posts on the current crisis in Lebanon. On August 4, a massive explosion hit Beirut, devastating most of the capital city. It became apparent that the explosion was caused by 2,750 tones of ammonium nitrate. The explosive, which would be also used as a fertilizer, had been left at the port without appropriate safety precautions since authorities confiscated it in 2013. The country had already been suffering from a severe economic, financial, and political crisis prior to the explosion, and the annihilation of the capital city has exacerbated the situation, at the worst time ever. In the series of three blog posts, we will unravel the crisis in Lebanon.
In the first post , we introduce you to the current situation in Lebanon, focusing on its sovereign default in March and ongoing negotiations with the IMF. In the second post , we dive deeply into the roots of the crisis and show how Lebanon faces inter-related economic, financial, monetary, banking, and political problems. Finally, in the third post , we report how COVID-19 has further disrupted the country and how international communities are reaching out to mitigate the ongoing crisis.