Lebanon's government foresees cancelling 'a large part' of the central bank's foreign currency obligations to commercial banks and dissolving non-viable banks by November, according to a financial recovery plan passed by the Cabinet on Friday.
Lebanese President Michel Aoun heads a final cabinet meeting before the government enters a caretaker status at the presidential palace in Baabda, Lebanon May 20, 2022. Dalati Nohra/Handout via REUTERSMay 20 - Lebanon's government foresees cancelling "a large part" of the central bank's foreign currency obligations to commercial banks and dissolving non-viable banks by November, according to a financial recovery plan passed by the Cabinet on Friday.
"We can put things on paper but we have to ensure whatever we committed to is being executed in the future," Chami said.The plan endorsed Friday foresees a full audit of the Central Bank's forex financial standing by July. Then, the government "will cancel, at the outset, a large part of the Central Bank's foreign currency obligations to banks in order to reduce the deficit in BDL's capital," the document said.
Lebanon's local currency has lost more than 90% of its value since its economic decline began in 2019, and banks have locked savers out of hard-currency deposits. "It's the only hope we have right now but there are plenty of shortcomings within the text and a small chance it will get implemented," Azar told Reuters."There's room to amend it on the margins as many details still aren't fleshed out," he said.
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