Summary
Lebanon and the Central Bank in particular have the means to contain any unforeseeable financial crisis in the short and medium term despite Moody's downgrading of the country's credit rating to Caa2, deep into junk territory, economists said Wednesday. Economists and bankers interviewed by The Daily Star brushed off the possibility of a default by the Lebanese government in 2019 and 2020, adding that the Central Bank had sufficient dollar reserves to roll over all maturing Eurobonds for close to two years at least.
The aim is to raise banks' private equity by $4 billion so this can be added to the cumulative capital of $20 billion.
"These severe sanctions have affected the volume of remittances to Lebanon which the country counts on to improve the balance of payments and also finance the public debt," Wazne said. He warned that Lebanon was not far from a financial crisis if the new Cabinet did not take "surgical solutions".
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