New cabinet would be major first step to easing pressures
The banking system will be able to finance the external funding gap over the next two to three years with existing foreign exchange liquidity, according to a report by Goldman Sachs released this month.
This will be achieved through the financial engineering operations of the Central Bank (BDL), the U.S.-based global investment bank said in the report, titled ‘How long can Lebanon finance its deficits?’
“Beyond [the three-year] time horizon, the risk of a forced external adjustment and potential default rises sharply in the absence of alternative financing sources,” Goldman Sachs said.
The annual net funding gap is expected to range between $5.5 billion and $6 billion over the next five years.