In the face of Lebanon’s worst economic downturns in decade with half of its population residing below poverty lines, questions were getting louder over the recent past on whether the crisis-sickened Western Asian country bordered with Israel to the south, would be able to repay the debts.
Amid such competing narratives on Lebanon’s ability to repay its debts, Lebanon’s Central Bank had proposed on Sunday, the 12th of January 2020, to swap its $1.2 billion worth of foreign bonds due in March for the nation’s longer-term bonds, several financial and government sources had unveiled on Sunday (January 12th).
In point of fact, Lebanon, the far-western Asian country having the highest ratio of public debt burden across the globe, had been duelling its worst economic crisis since the era of civil war between 1975 to 1990, while a steep decline in international sovereign bond purchase alongside a substantial scale of credit risk looming large had been pointing towards an utterly unpleasant scenario that the debt-laden nation might not be able to repay its debts due on March this year, suggested analysts.
Nonetheless, adding that an implementation of such kind of approach would require Government approval and an amendment of earlier legislation, but would come as a breather for the nation’s debt-ridden Central Bank, a senior Government Official said on Sunday (January 12th), “This is the issuance of new bonds, but in agreement with the holders of bonds maturing in the month of 3 2020. Of course, exchange of bonds requires an authorization and also needs a law. ”