Big money

In May 2016, Banque du Liban (BDL), Lebanon’s central bank, completed the first phase of a swap operation with the Ministry of Finance (MoF). Following that, BDL pulled the financial engineering tool out of its bag. It proceeded to banks with an offer to enter into a transaction in which they would have to bring in money against fresh US dollars inflows. With their existing or new funds, banks could opt to purchase any of three tranches of Eurobonds held by the central bank since their interaction with the MoF, and/or CDs issued by the central bank at the same maturities and same coupon rates as the Eurobonds.  The precise total of Eurobonds and CDs which the central sold to banks is not yet compiled but it is generally assumed to be above $10 billion. Also not known is the ratio between money that banks pulled in from correspondent accounts