EMIR OF QATAR Sheikh Tamim bin Hamad al-Thani in Doha.
(photo credit: NASEEM ZEITOON/REUTERS)
DOHA- Qatar will invest $500 million in Lebanese government U.S. dollar bonds to support Lebanon's struggling economy, the Qatari Ministry of Foreign Affairs said on Monday.
Lebanon has one of the world's highest levels of public debt compared to GDP and stagnant growth.
Comments from its finance minister ten days ago about the public debt triggered concerns, leading to a sell-off in the country's dollar-denominated sovereign bonds, though they later partially recovered.
The decision to invest came after Qatar's Emir Sheikh Tamim bin Hamad Al Thani made a brief visit to an Arab economic summit in Beirut on Sunday, during which he met Lebanese President Michel Aoun.
Qatar is at the heart of a bitter row among Gulf Arab countries, which pits it against Saudi Arabia - historically a backer of Lebanese Prime Minister-designate Saad al-Hariri.
Hariri, who has Saudi citizenship, was summoned to Riyadh a year ago, briefly detained and compelled to resign as prime minister until France intervened to free him. Saudi Arabia denied that, but its relationship with Hariri and Lebanon is seen as less strong than before.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic, trade and transport ties with Qatar in June 2017. They accuse Qatar of supporting terrorism and cultivating ties with Riyadh's regional foe Tehran.
"We wish stability and prosperity for the Lebanese republic and the Lebanese people, and that the Lebanese economy will recover. The region needs a strong and prosperous Lebanon," Qatari Foreign Minister Mohammed bin Abdulrahman Al Thani said in a statement.
Lebanon's dollar-denominated bonds rose across the curve on the news, with the 2025 issue up almost 1 cent and the paper due in 2037 adding 1.2 cents in early trade, according to Tradeweb data.
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