BEIRUT- Lebanon is studying options for dealing with its forthcoming Eurobond maturities, including whether to pay the debt, the finance minister said on Thursday after meeting with the president and central bank governor.
The heavily indebted country is in deep financial trouble and must decide whether to repay its maturing foreign currency debt on time, including a $1.2 billion Eurobond due on March 9.
On Wednesday, Lebanon formally requested the International Monetary Fund's technical help in tackling its unprecedented financial and economic crisis.
Finance Minister Ghazi Wazni, speaking after Thursday's meeting, said numerous options for dealing with the Eurobonds were discussed.
"These options, each of them was studied in depth - whether to pay or not to pay - and everyone expressed their view frankly in this matter," Wazni said in a news conference.
"The decision ... was that we will continue to study in the coming period so we can take this decision," he said.
A decision should be taken by the end of the month but may come sooner, Information Minister Manal Abdel Samad said after a cabinet meeting.
The financial crisis, worse than any Lebanon endured in its 1975-90 civil war, erupted last year as slowing capital inflows led to a liquidity crunch and protests erupted against the ruling elite.
Banks have since curtailed depositors' access to their savings in foreign currencies and blocked most transfers abroad since October. The Lebanese pound has lost more than a third of its value.
Wazni said a circular in coming days would regulate the banks' informal capital controls to bring "clarity" and protect depositors. Banks could no longer deal with depositors in a way that was "illegal and unclear", he said.
A new circular from the central bank set an interest rate cap of 4% on dollar bank deposits and a cap of 7.5% on Lebanese pound deposits, according to several Lebanese news outlets.
The circular, published by al-Jadeed, LBC and MTV on Thursday, set a cap of 2% on dollars deposited for a month and a 4% cap on dollars deposited for a year or more. The rates apply on deposits made or renewed from Feb. 12.
The central bank in December capped deposit interest rates at 5% on U.S. dollars and 8.5% on Lebanese pounds.
The new government, which won a vote of confidence in parliament this week, has urged banks to slice interest rates to spur economic activity and ease the strain on the public finances.
(Reporting by Tom Perry, Eric Knecht and Ellen Francis; editing by Hugh Lawson, Larry King) ((firstname.lastname@example.org; Reuters Messaging: email@example.com))