Lebanon Central Bank Urges Banks to Recapitalise, Repatriate Funds

Lebanon’s central bank has told domestic banks to recapitalize through new means, urge big depositors to move funds back to the country and provision for a 45% loss on their Eurobond holdings, according to several circulars published on Thursday, Reuters reported. Central Bank Governor Riad Salameh later told Reuters the measures aimed to strengthen the banking system, paralysed by the worst financial crisis in Lebanon’s history which has been compounded by this month’s Beirut port blast and COVID-19. Domestic banks have frozen savers out of their dollar deposits and largely blocked transfers abroad since late last year due to the economic and financial crisis, which culminated in Lebanon defaulting on its huge foreign currency debt in March, and has ravaged the currency. Read more