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Moody’s: Govt plans will provide brief reprieve

Moody’s vice president warned Wednesday that the cancellation of interest rates under the Lebanese government’s economic program would provide the country with relief in the short term only and would undermine investor confidence in the medium and long term. “While the mooted interest rate cancellation on BDL local-currency debt holdings would provide liquidity relief in the short term, the effective debt monetization invariably undermines confidence in government debt service capacity, compounding pressures on the currency peg and debt sustainability over the medium term,” said Elisa Parisi-Capone, a Moody’s vice president.
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