Lebanon Central Bank has told banks and financial institutions to extend exceptional dollar loans at zero interest to individuals and businesses affected by Tuesday's disastrous Beirut port explosion.
Lebanon has been shattered by the tragic blast that erupted out of Beirut's port area killing at least 135 people and wounding thousands. The damages are estimated to be in billions of dollars. According to reports, Beirut governor Marwan Abboud said the repair bill for the capital alone will cost up to $5 billion.
Exceptional loans should be made regardless of customer account limits, carry no interest and be repaid over five years. The loans can be repaid in Lebanese pounds based on the interbank rate of 1,515 pounds to the dollar, Reuters reported.
The country's economy minister Raoul Nehme said that without foreign aid, the state and central bank have very limited capacity to tackle the impact of the port warehouse explosion that pulverised Beirut.
According to Nehme, working with the IMF was the only way out for Lebanon, which is neck-deep in debt and already struggling with a dollar crunch even before Tuesday's blast.
Lebanon suspended a $1.2 billion Eurobond payment and is seeking talks with creditors to restructure its entire $90 billion debt pile.
Talks with the IMF have now stalled due to a disagreement between the government, banks and lawmakers over the scale of the financial losses.
(Writing by Seban Scaria email@example.com ; editing by Daniel Luiz)
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