Lebanon eyes 'good news' for economy after UAE meetings

Lebanon is awaiting “good news” after seeking financial support from the United Arab Emirates to shore up its heavily indebted economy, a government official told Reuters on Monday.

Prime Minister Saad al-Hariri had a “good meeting” with UAE Crown Prince Sheikh Mohammed bin Zayed al-Nahyan, the source said, after a conference in Abu Dhabi, where the Lebanese delegation sought a cash injection for its central bank and investments in food, infrastructure, oil and gas, and renewable energy.

Faced with one of the world’s highest debt burdens, low growth and crumbling infrastructure, Beirut has vowed to implement long-delayed reforms. It is also seeking to curb a sharp loss of confidence among foreign investors and among depositors who are turning away from the Lebanese pound.

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While no deal was formally announced, Lebanese officials portrayed Monday’s high-stakes talks as positive while Abu Dhabi stressed its support for Lebanon. In response, dollar bonds issued by heavily-indebted Lebanon rose.

Crown Prince Mohammed “stressed during the meeting that the UAE…is keen on supporting its relationships with Lebanon on different levels, and stands by it in all that preserves its security and stability,” state news agency WAM reported.

Hariri told Reuters earlier on Monday he was hoping that the UAE would inject cash into its central bank.

The bank has been drawing down its foreign exchange reserves to repay the state’s maturing dollar-denominated debt and said last week it was prepared to do more.

Central bank Governor Riad Salameh, also attending the conference, said it was continuing to provide dollars to local financial markets, adding that Lebanon has “numerous possibilities” as it looks for assistance but it expects support from the UAE.

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