Staying on the subject of #Lebanon's BoP, how is the current account deficit (25% of GDP) financed? Well, not surprisingly, the $ outflows have traditionally been covered by nonresident FX deposit inflows, portfolio inflows, and banking flows. All of which have dried up now. 
More importantly, the composition of that financing has changed drastically since 2010. Steady, stable, long-term flows like FDI, which used to finance a large chunk of the C/A deficit, are now insignificant (unsurprising given the unfavourable investment climate)
Between 2010-2016, nonresident FX deposits became a key source of financing for the ballooning current account deficit. Flows channeled through the banks also contributed largely. That permitted BdL to continue building reserves (only one year of reserve drawdown)
But all that changes starting 2016. In that year, portfolio flows spiked as the BdL embarked on its first round of financial engineering, and this coincided with shrinking role of nonres FX deposits in funding the still-rising current account deficit.
And it's been downhill since then. Chart clearly shows shrinking portoflio flows, shrinking nonres FX deposits, and shrinking "other" flows, while the C/A deficit kept rising! The need for FX was continuing to rise while available sources of FX were starting to dry up
By 2018, portfolio inflows had reversed, nonres FX deposits were negligable, and BdL had to use its reserves to fund the deficit. Interestingly, a massive spike in "net errors and omissions" to fund the deficit. This is usually due to "statistical discrepancy".
But more often than not, it entails flows that aren't fully accounted for (cash in a suitcase for instance!) A spike of unexplained flows is typically observed in EMs facing BoP crisis. Think Turkey in 2018.
Full-year 2019 data isn't out yet. But two things are clear: The available sources of financing Lebanon's persistent savings-investment deficit are gone. The options are limited. Imports have to fall drastically. Or reserves have to be burned entirely, absent a funding package
