Lebanon’s central bank asked local lenders to raise their capital by 20% in the next year, the state-run National News Agency reported, to boost their liquidity and prepare for possible downgrades in credit ratings, Bloomberg News reported. The Banque du Liban said raising capital by $4 billion would help banks “confront the current situation and any future developments particularly in the face of a possible credit downgrade,” the news agency said.

Lebanese banks have curtailed the transfer of dollar deposits abroad until political turbulence that has engulfed the country and raised fears of a collapse in its currency peg subsides, Bloomberg News reported. Lebanon has not imposed official restrictions on the movement of money as lenders reopen their doors after two weeks of nationwide anti-government protests. But banks have independently moved to tighten informal limits already in place for months to avoid capital flight amid crumbling confidence.

The resignation of Saad al-Hariri as Lebanon’s prime minister on Tuesday has plunged the country’s economy deeper into uncertainty as protesters continue to occupy public squares, calling for a clear-out of the entire political elite, the Financial Times reported. Banks remain shuttered for a second week amid fears that the unrest will trigger capital flight and a run on lenders by customers anxious about their dollar deposits. The Banking Association said they would reopen on Friday.

Lebanon’s political and banking crisis has put growing pressure on its 22-year-old currency peg to the U.S. dollar and foreign funds fear a devaluation now could be disastrous for a country with one of the world’s biggest foreign debt burdens, Reuters reported. The risk of devaluation has risen as Lebanon grapples with its most severe economic pressures since the 1975-90 civil war, with widespread protests that have toppled the coalition government of Saad al-Hariri.

Lebanon’s government announced a long list of measures on Monday it hopes will fix the nation’s finances and appease the tens of thousands of people who’ve taken to the streets in the past week, Bloomberg News reported. Along with a proposal to halve the salaries of ministers and lawmakers, Prime Minister Saad Hariri said he’d slash next year’s budget deficit to 0.6% of gross domestic output, from almost 10% in 2019. One of his senior advisers also said the central bank will waive coupons on local-currency government debt, but Eurobonds won’t be affected.

It is well known that Lebanon is a highly indebted country. Its debt-to-GDP ratio has been stuck above 150 per cent for two decades while its economy has somehow managed to keep growing, albeit at lacklustre rates, the Financial Times reported in a commentary. Prophets of doom have been predicting a sovereign default for years, only to be proved wrong by the resilience of Lebanon’s financial sector and the savvy of its central bank.

All but cut off from international credit markets and facing dollar shortages at home, Lebanon has come up with another workaround to allow the government to borrow money without raiding the central bank’s reserves, Bloomberg News reported. Local lenders, already the biggest holders of Lebanon’s sovereign debt, will cash out certificates of deposit, or CDs, at the central bank to buy some of Lebanon’s planned Eurobond issue of up to $3 billion, a person familiar with the matter said.

The United Arab Emirates lifted a ban on its citizens visiting Lebanon on Monday as the Beirut government sought UAE help in steering the heavily indebted economy out of deep crisis, Reuters reported. Prime Minister Saad al-Hariri, leading a delegation to Abu Dhabi seeking support, had told Reuters he was hoping the UAE would inject cash into its central bank. Before the lifting of the travel ban was announced, Hariri said he was “optimistic” after visiting the UAE and meeting with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan.

Lebanon may need support from loyal local banks or even friendly Gulf states to buy a new Eurobond as foreign investors look set to shun the sale, citing the country’s long list of troubles, Reuters reported. A Eurobond of around $2 billion is being prepared for sale this month, with cash raised earmarked for refinancing maturing debts and shoring up Lebanon’s shaky public finances. But international appetite appears muted, with fund managers wary of putting money into one of the world’s most indebted countries as it grapples with a multitude of national and geopolitical concerns.

A rally in Lebanon’s Eurobonds will prove short-lived if the country’s government can’t get serious about reforms that are needed to claim Saudi Arabian aid, Bloomberg News reported. The highly-indebted nation’s dollar yields sunk 104 basis points on Wednesday, the most since 2002, after Saudi Arabia said it was mulling financial support for its Middle Eastern neighbor. Investors also took heart from Prime Minister Saad Hariri traveling to Paris to meet French President Emmanuel Macron in a bid to unlock $11 billion of aid promised by international donors last year.