Qatar has bought some Lebanese government bonds as part of its planned $500 million investment in the country’s struggling economy, a Qatari government official told Reuters on Sunday, a potential boost for the country’s depleted finances.
Tiny but wealthy Qatar said earlier this year it would invest $500 million in Lebanese government U.S. dollar bonds to support Lebanon’s economy, which has one of the world’s highest levels of public debt to GDP and stagnant growth.
Qatar has not disclosed the timing or size of the bond purchases made so far, but any purchase large enough to push down yields would be a boon as Beirut grapples with public debt of 150 percent of gross domestic product.
“Qatar has always been committed to strengthening its ties with the brotherly Lebanese Republic. Hence it decided to invest $500 million in the Lebanese economy, including purchasing Lebanese government bonds,” a government official said.
“Some of the bonds have been purchased. The rest of investments are due as planned with the Lebanese government,” the official said.
Moody’s said last week that Lebanon is at risk of a debt rescheduling or steps that may constitute a default on the back of slowing capital inflows and weak deposit growth despite austerity measures in its 2019 draft budget.
The $500 million Qatari investment pledge, made last January, prompted its regional rival Saudi Arabia to make a similar commitment just days later to support Lebanon “all the way” to safeguard its stability, though the kingdom has not yet announced any bond purchases.
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, which it denies.
TWEET YOUR COMMENT