Middle East & Central Asia News
LAST UPDATE: August 2, 2025
Lebanon passes bank restructuring law in step towards IMF reform
Lebanon has enacted a banking restructuring law, establishing a framework and oversight commission to handle defaulting institutions—a key step toward meeting IMF reform conditions after the 2019 financial collapse (ft.com)
Insight
The legislation marks vital judicial and fiscal groundwork for unlocking international financing, yet delays on loss allocation expose persistent political and institutional friction.
Pakistan’s annual inflation accelerates to 4.1% in July
Pakistan’s annual consumer inflation rose to 4.1 % year‑on‑year in July, up from 3.2 % in June, driven by increases in prices for food, fuel, medicines, and utilities. Month-on-month inflation was 2.9 % (Reuters, Arab News)
Insight
The stronger inflation reading reflects mounting cost pressures on households, prompting the central bank to maintain its policy rate at 11% despite expectations of a future rate cut, highlighting limited monetary flexibility ahead.
Trump eyes bringing Azerbaijan, Central Asian nations into Abraham Accords, sources say
The Trump administration is actively discussing including Azerbaijan and several Central Asian nations into the Abraham Accords, aiming to deepen cooperation with Israel in trade and defense. Talks are more advanced with Azerbaijan; conflict resolution with Armenia is seen as a precursor (Reuters, Reuters)
Insight
This proposed expansion signals an effort to extend U.S. and Israeli diplomatic influence into a strategically important and resource-rich region, though progress hinges on fragile regional conflicts and symbolic overtures rather than substantive normalization.
