Lebanon on brink of defaulting on its debt without a last-minute deal: Report

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Lebanon looks set to announce on Saturday it cannot make upcoming dollar bond payments and wants to restructure $31 billion of foreign currency debt, sources said, unless a last-minute deal with creditors is found to avoid a disorderly default.

Debt default would mark a new phase in a financial crisis which has hammered Lebanon’s economy since October, slicing around 40% off the value of the local currency and leading banks to deny savers full access to deposits.

Prime Minister Hassan Diab will announce Lebanon’s decision on the Eurobonds after government meetings on Saturday, just two days before the heavily indebted state was due to pay back holders of a $1.2 billion Eurobond due on March 9.