Lebanon’s Chances of Avoiding Default Dim as Reserves Sink

Lebanon may have just repaid $1.5 billion of Eurobonds, but its chances of escaping a default still look grim. It will probably come down to how far it can stretch its foreign reserves while containing the worst currency crisis since it pegged the pound over two decades ago, Bloomberg News reported. On both counts, recent developments have been negative. The central bank’s reserves dropped by nearly $800 million in the first two weeks of November alone. At the current pace of depletion, they could run out as soon as next June, according to a Bank of America Merrill Lynch report seen by Bloomberg. Deprived of the remittances from Lebanon’s diaspora that have sustained its finances for years, the economy is unraveling. The bond market is flashing warnings of a default. Read more