Qatari Gift Still a Mystery But Lebanese Search for Cash Goes On
(Bloomberg) -- The ruler of one of the wealthiest nations in the world barely spent a few hours in Lebanon but he left much trepidation, hope and confusion in his wake.
An Arab economic summit opened in Beirut with a report in local media on Sunday that Qatar is prepared to deposit $1 billion with the Lebanese central bank. If true, it could be just the cash infusion Lebanon’s tottering economy needs to reassure bond holders still reeling from mixed remarks by officials about the possibility of debt restructuring.
But Lebanon’s caretaker economy minister, Raed Khoury, said that while other officials had told him of Qatar’s deposit, he couldn’t confirm it. Foreign Minister Gebran Bassil was even more evasive.
“The confidence in Lebanon is still big and some countries will show it,” Bassil said when asked about Qatar’s commitment.
Lebanon, one of the world’s most indebted nations, tried to capitalize on the Qatari ruler’s attendance at the Arab world’s first economic and development summit since 2013. Most leaders skipped the event in a reflection of the tensions that still roil the region over Syria.
The Voice of Lebanon radio reported that Qatar’s Sheikh Tamim bin Hamad Al Thani has agreed to deposit the funds and help pay for the cost of the summit, citing unidentified people with knowledge of the decision.
“We hope that this is true as well, and we hope other countries participate in the same manner as well,” Khoury said in an interview.
Qatari officials didn’t immediately respond to requests for comment. LBCI television later cited the Lebanese presidential palace’s media adviser as saying there was “no truth” to the report.
Lebanon’s Finance Minister Ali Hasan Khalil roiled bond markets this month when he told a newspaper that the country may restructure its debt as part of a plan to repair public finances battered by sluggish economic growth and the war in neighboring Syria.
He later denied the plans and several officials sought to reassure investors that the country will honor all of its obligations on time.
Qatar’s ruler, whose first-ever visit to Lebanon wasn’t announced until Saturday, arrived just before the summit and departed soon after it got under way. It was symbolic as his country’s latest effort to break the isolation of a Saudi-led embargo.
As the world’s biggest exporter of liquefied natural gas, Qatar frequently finds itself playing the role of benefactor, doling out cash and promises in a region riven by feuds. The emir met President Recep Tayyip Erdogan at the height of Turkey’s financial crisis last year and pledged to invest $15 billion in the country. In 2012, Qatar made a deposit at Egypt’s central bank.
Lebanon has agreed to reduce its deficit by a percentage point annually for five years as one of the main conditions to unlock $11 billion in loans and grants offered at a 2018 donor conference.
The central bank has maintained stability through stimulus measures and financial engineering, made possible by the billions of dollars deposited into Lebanese banks by the nation’s diaspora.
Additional outside support would create “more liquidity of foreign currency at the central bank” and help it maintain “more monetary stability,” Khoury said.
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