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Moody’s downgrades
Lebanon’s rating amid
financial crisis
Credit rating agency Moody’s downgraded Lebanon’s government issuer ratings Friday to Ca from Caa2 and changed the outlook to stable amid concerns the country might be forced to restructure its massive debt.
Lebanon is experiencing its worst economic and financial crisis since the
end of the 1975-90 civil war. The situation deteriorated after nationwide protests broke out in mid-October against the ruling
elite blamed for decades of corruption and mismanagement.
In recent months, the local currency that had been pegged to the dollar since 1997 has lost some 60% of its value on the black market.
An International Monetary Fund (IMF) delegation began meetings on Thursday in Lebanon to provide advice on dealing with the crippling economic and financial crisis amid concerns the country might default on its Eurobond debt payment for the first time.
The agency said the Ca rating reflects Moody’s expectation that domestic and external private creditors will likely incur substantial losses in “what seems to be an all but inevitable near-term government debt restructuring in light of rapidly deteriorating economic and financial conditions.”
It added that the situation “increasingly threatens the sustainability of the government’s debt and currency peg.”
Moody’s said Lebanon’s long-term foreign currency bond and deposit ceilings have both been lowered to Ca from Caa1 and Caa3, respectively. The long-term local-currency bond and deposit ceilings have been lowered
to Caa1 from B2, while the short-term foreign currency bond and deposit ceilings remain Not Prime.
Lebanon’s massive debt, stands at $87 billion — 150% more than the country’s GDP. Amid a severe liquidity crunch, banks have imposed informal capital controls, limiting withdrawals to a few hundred dollars a month. The country’s economy has depended heavily on the US dollar since the civil war ended in 1990.
A new government headed by Hassan Diab won a vote of confidence earlier this month and has vowed to work on getting Lebanon out of its economic and financial crisis.
Moody’s said that at the end of December, bank deposits had declined by $15.7 billion, or 30% of the GDP from a year before.
reuters
Tensions rise in Syria after
Turkish soldier killed in
Idlib
Turkish President Recep Tayyip Erdogan has said he will meet the leaders of Russia, France and Germany next month to discuss the situation in northwest Syria, where a military push by Moscow-backed government forces against the last opposition-held enclave has displaced nearly a million people.
His comments on Saturday came as the Turkish defence ministry said a Turkish soldier had been killed in Syria’s Idlib province in a bomb attack by government forces, becoming Turkey’s 16th military death during a month in which talks between Ankara and Moscow have failed to de-escalate a recent spike in fighting.
Speaking to reporters in Izmir, Erdogan did not specify where the March 5 meeting would be held. He added, however, that Turkey “determined our road map” for Syria
after calls on Friday with Russian President Vladimir Putin, German Chancellor Angela Merkel and French President Emmanuel Macron.
“I expressed our determination clearly” to them, said Erdogan, who last week threatened an “imminent” operation against Syrian forces in the region.
Turkey has sent thousands of troops and equipment to the region just south of its border to head off the government forces’ campaign driven by Russian air raids. Already hosting some 3.7 million Syrian refugees, it says it cannot handle another wave and has closed its borders.
Macron and Merkel on Friday expressed concern about the humanitarian situation in Idlib and urged an end to the conflict, while the Kremlin said it was discussing the possibility of holding a four-way summit.
The Turkish president told Putin over
the phone on Friday that the solution was to return to the Sochi agreement they signed
in 2018, which allowed Turkey to establish military posts across Idlib designed to prevent a Syrian government assault.
That deal has been increasingly set aside as Russian-backed Syrian forces advance steadily into the region, the final stronghold of rebels fighting Syrian President Bashar al-Assad’s government during a nine-year war that has killed hundreds of thousands of people and displaced millions.
The United Nations warned on Friday that an escalation in fighting could end in
a “bloodbath” and called for an immediate ceasefire. Nearly 900,000 people, more than half of whom are children, have fled their homes since December 1, when the Russian- backed Syrian government forces pressed ahead with their military offensive,
Separately, Turkey’s defence ministry said its forces retaliated to the “despicable” bomb attack that killed the soldier, destroying
21 Syrian government targets. It said the soldier was a tank mechanic who died when transferred to hospital.
The incident came two days after two Turkish soldiers were killed in an air raid in Idlib, which Ankara blamed on Syrian government forces.
Earlier this month, 13 Turkish soldiers were killed in Syrian attacks, prompting Erdogan to say Turkey will attack Syrian forces “anywhere” in Syria if another soldier was hurt.
Syrian troops have reconquered swathes of Idlib and retaken the strategic M5 highway connecting the country’s four largest cities, as well as the entire surroundings of Aleppo city for the first time since 2012.
On Saturday, the highway opened for
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