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04 March 2024

Lebanon hopes for $1bn KSA deposit

By Agencies


Lebanon's government has asked Saudi Arabia to deposit $1 billion at the central bank to boost the country's foreign currency reserves, the finance minister was quoted as saying on Wednesday.


"We, as a government, requested from the Saudi leadership a new deposit of value $1 billion. We detected a responsiveness which we hope will be translated soon," Jihad Azour told the pan-Arab Asharq Al Awsat newspaper.

"This will strengthen the reserves of the central bank and monetary stability," said Azour, whose government is locked in a paralysing political struggle with opposition forces led by Hezbollah and backed by Syria.


Saudi Arabia is a strong backer of the Beirut governing coalition. Azour told Reuters on Monday there were "positive indications" that Riyadh would make a deposit at the central bank. But he declined to give the amount. Azour said in the interview with Reuters there was no short-term need for the funds, but the deposit would send "a very positive signal to the market".


Lebanon's strong foreign currency reserves, measured at $9.8bn at the end of 2007, were one reason cited by Moody's in a February 7 statement for maintaining its low B3 rating on the country's government bonds.


Standard & Poor's in January cut its long-term sovereign foreign currency credit rating on Lebanon by one notch to "CCC+" from "B-" because of the political conflict - the worst since the 1975-90 civil war.


The crisis has paralysed much of government, left the country without a president since November and led to bouts of street violence between followers of the rival sides.

Lebanon is saddled by public debt of some $42.06 billion - equal to some 171 per cent of its gross domestic product. (Reuters)