The currency reserve has reached a dangerous level .. Lebanon announces the first default on its debt

Lebanese Prime Minister Hassan Diab said Saturday evening that the hard currency reserves in Lebanon have reached a dangerous level, which leads to suspending the payment of international debt bonds, in the first failure of Lebanon to pay debts in its history.

Diab said in a televised speech that Lebanon is unable to pay the debts due in the current circumstances and that it will work to restructure its debts through negotiations with bond holders.

He continued: The reserves have reached a critical and dangerous level, causing the Lebanese government to suspend the maturity of 9 March of Eurobonds.

He added, "The Lebanese state will seek to restructure its debts in a manner consistent with the national interest by entering into fair and well-intentioned negotiations with all creditors." This comes after months of discussions and amid continuing unprecedented protest movement for nearly five months, rejecting a political class seen as corrupt And helpless.

In theory, the Lebanese state must repay 1.2 billion dollars of Eurobond bonds, which are due after two days, which are treasury bonds issued in dollars, of which private banks and the central bank possess a part.

The Prime Minister said that his country will seek to restructure its debts in a manner commensurate with its national interest through negotiations, noting that corruption and waste wasted the state, and that nearly 40% of the Lebanese are below the poverty line.

Debt fears
Diab indicated that the total public debt exceeded 90 billion dollars, which constitutes more than 170% of the GDP, asking: How do we pay the creditors and the Lebanese cannot?

This decision not to pay came after a meeting attended by the Presidential Palace in Baabda, the President of the country, the President of Parliament, the President of the Court and a number of officials, including the Minister of Finance and the Governor of the Central Bank.

"The meeting unanimously decided to stand by the government on any option it will adopt in the area of ​​debt management, except for the payment of outstanding debts," said a statement issued by the meeting.

The Lebanese banks that hold a large share of the public debt, including nearly half of the Eurobonds estimated at $ 30 billion, called on the state to avoid default which would deepen the liquidity shortage in the US currency.

Amid fears of losing foreign reserves, banks previously imposed severe restrictions on dollar transactions, sometimes reaching the limit of withdrawing only a hundred dollars per week, and financial transfers abroad were prohibited.