Beirut central bank. (The Daily Star/Mohammad Azakir)
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A new report by Citigroup said that the amount of U.S. dollars at Lebanese banks has dropped by at least $2.5 billion due to the recent purchase of government eurobonds by the local lenders.According to the Central Bank circular, the provisions would prepare banks to meet the IFRS 9 requirements that will come into force in January 2018 .Citi said the debt swap between the Central Bank and Finance Ministry has given a temporary breathing space to the Lebanese government.It repeated that this financial engineering has also beefed up the Central Bank foreign currency reserves.However, Citi warned that this swap could cause higher yields on Lebanese sovereign bonds in the future.
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