Fitch Ratings downgraded Lebanon's credit rating for the third time in a year, expecting Lebanon to restructure its debt or default.
Fitch attributed its decision to downgrade the CCC to the CC by believing that restructuring or defaulting has become more likely given heavy political fog, restrictions in the movement of capital and damage to confidence in the banking sector. It also warned that this will impede the necessary capital flows to meet the financing requirements of Lebanon.
Lebanon’s public debt equals about 150 percent of GDP, and is one of the heaviest debt burdens in the world.
Immediately after the downgrade of Fitch's rating, caretaker Prime Minister Saad Hariri contacted IMF and World Bank officials, discussing the issue of Lebanon obtaining "potential technical assistance" in the near future.
Hariri informed David Malpass, President of the World Bank and Kristalina Georgieva, the Director of the International Monetary Fund, that he is committed to preparing an urgent plan that can be implemented immediately after the formation of a new government, which contributed to the rise in Lebanese government bonds.
Source (CNBC Arabic Website, Edited)
