Beirut, Oct 21 (IANS): Lebanon has multiple challenges to meet before unlocking aid by the International Monetary Fund (IMF), experts have said.

The first challenge is that the cabinet needs to present a comprehensive strategy about Lebanon's planned reform to the IMF in a timely manner, Ghassan Ayache, former Vice Governor of the country's central bank, told Xinhua news agency.

He noted that the timing is critical, especially since the IMF is not in favour of striking deals with a temporary cabinet.

"The IMF prefers to wait until the parliamentary elections in 2022, which will give birth to a new cabinet capable of making at least medium-term reform promises," Ayache said.

The second challenge, according to Ayache, is to form a committee capable of holding talks with the IMF by adopting a well-coordinated vision about Lebanon's crisis, causes and necessary solutions.

Lebanon has formed a committee for the IMF talks. However, members are at odds with each other, raising public concerns about their ability to overcome the differences to reach a successful deal with the Fund, said Ayache.

Lebanon is facing the worst financial crisis in its history with the public debt hovering around $98 billion and its currency has lost more than 90 per cent of its value.

Earlier this year, Lebanon defaulted on a $1.2 billion Eurobond, the first sovereign default in the country's history.

Moreover, banks have imposed strict capital controls as they lack the hard currency to repay depositors.

Another challenge facing Lebanon is to determine losses and distribute them among the state, the central bank, commercial banks, depositors and creditors, said Mounir Younes, economist and former chief editor of Al Qabas Kuwaiti newspaper.

Financial advisory firm Lazard estimated that losses of Lebanon's financial system stand at over $80 billion, a figure that was disputed by MPS, the central bank and commercial lenders but fell in line with the IMF's estimation.

Restructuring the banking sector is another challenge for Lebanon, said Younes, since banks in the country have been on the verge of bankruptcy.

"If IMF talks succeed, Lebanon will be able to restructure its debt and borrow again from international financial markets to revive the economy, achieve growth and create job opportunities," he noted.

Prime Minister Najib Mikati announced on Tuesday that Lebanon had started drafting its reform plan, in hope of reaching a deal with the IMF by the end of 2021.