Lebanese government is discussing dealing with international bonds

The Lebanese Finance Minister, Ghazi Wazni, said after a meeting with President Michel Aoun and the Governor of the Banque du Liban Riad Salameh today, Thursday, that the government will continue to discuss its options to deal with the imminent international bond maturities, including whether it will meet the payments or not.

My weight added, that Lebanon has many options, each of which was discussed in depth during the meeting, saying that the decision is important and not easy, according to what Reuters reported.

Later, Lebanese media sources confirmed that the government formed a committee to study ways of dealing with imminent sovereign debt maturities, including international bonds of $ 1.2 billion due in March.

Regulating the movement of capital

On another issue, the Lebanese minister said that a circular would be issued within the next few days regarding the regulation of informal restrictions on the movement of capital imposed by commercial banks, in order to increase clarity and protect depositors.

Several Lebanese media outlets said today, Thursday, that a circular from the Central Bank of Lebanon set a ceiling for the interest rate at 4% for dollar deposits and 7.5% for Lebanese pounds.

The circular sets a ceiling of 2% on dollar deposits for a month and 4% on one or more general deposits. The rate applies to new or renewed deposits from yesterday, February 12.

The new government finds itself facing difficult possibilities to repay $ 2.5 billion of foreign bonds, due between March and June, which prompted it to request formally from the International Monetary Fund to send a technical delegation to assist the country in preparing a comprehensive economic, monetary and financial plan to save it from The liquidity crisis entailed in it, as confirmed by government sources.

Request for IMF assistance

On Wednesday, the day after she gained the confidence of Parliament, the new Lebanese government asked the International Monetary Fund to provide advice on its economic plan, according to the IMF spokesperson.

Lebanese government is discussing dealing with international bonds

However, the IMF statement did not include any reference to financial aid to Lebanon, which is suffering from an acute crisis. A statement by International Fund Spokesman Jerry Rice said that the Lebanese authorities requested “technical advice and assistance on the macroeconomic challenges facing the Lebanese economy.”

International Creditors Group

On Wednesday, a group of international creditors for Lebanon formed an informal discussion group to assess options on how lenders manage developments in Lebanon.

“The group will facilitate communication between the various creditors and is ready to engage in any discussions with the Lebanese Republic,” Greylock Capital and Mangart Advisers said Wednesday.

Lebanon is one of the world’s largest debt-burdened countries, with the ratio of public debt to GDP reaching 150 percent.

The new Lebanese government is under growing pressure to tackle the debt burden, and it must make a decision quickly on how to deal with $ 1.2 billion in international bonds, due in March.

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