Le­banon bat­tles fi­nan­cial cri­sis

Pretoria News - - WORLD - |

NE­GO­TI­A­TIONS to re­struc­ture Le­banon’s for­eign cur­rency debt should not last more than nine months if well-in­ten­tioned, the econ­omy min­is­ter was quoted as say­ing, af­ter the heav­ily in­debted state said it could not meet its debt re­pay­ments.

Le­banon is set to de­fault on its sov­er­eign debt af­ter declar­ing it could not pay forth­com­ing ma­tu­ri­ties – the first of which is a $1.2 bil­lion (R18.8bn) bond due to­day. The state has called for re­struc­tur­ing ne­go­ti­a­tions.

The coun­try is grap­pling with a ma­jor fi­nan­cial cri­sis which came to a head last year as cap­i­tal in­flows slowed and protests erupted over decades of state cor­rup­tion and bad gov­er­nance.

The de­fault will mark a new phase in a cri­sis that has ham­mered the econ­omy since Oc­to­ber, slic­ing around 40% off the value of the cur­rency, deny­ing savers free ac­cess to their de­posits and fu­elling un­em­ploy­ment and un­rest.

Face-to-face ne­go­ti­a­tions be­tween Le­banon and bond hold­ers are ex­pected to be­gin in about two weeks, a source fa­mil­iar with the mat­ter told Reuters yes­ter­day.

Prime Min­is­ter Has­san Diab said for­eign cur­rency re­serves had hit a “crit­i­cal and dan­ger­ous” level and were needed for ba­sic im­ports.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.