Lebanon’s Bonds Rise After First President Since 2022 Is Elected, Ending Political Deadlock
Lebanon’s government bonds went up after parliament chose army chief Joseph Aoun as the new president, ending a long period without a leader since 2022.
Lebanese Bonds
Most of Lebanon’s international bonds, which have been in default since 2020, rose in value after the presidential election. By Thursday, they were trading at about 16 cents per US dollar, an increase of 0.8 to 0.9 cents.
Before the election, the bonds had already risen by 0.3 to 0.4 cents, reaching just over 15 cents per dollar.
The value of these bonds has tripled since September when Israeli attacks killed key Hezbollah leaders and severely damaged the group’s infrastructure. Hezbollah was seen as a major hurdle in resolving Lebanon’s political crisis.
Aoun’s Election
Joseph Aoun was elected as Lebanon’s 14th president, winning 99 votes in the second round of voting during a parliamentary session. His election was secured with the support of Hezbollah and the Amal Movement. In the first round, he fell short of the 86 votes required because these two Shiite parties withheld their support.
Lebanon had been without a president or a fully functioning government since October 2022, when Michel Aoun’s term ended. Political factions were unable to agree on a candidate during this time.
Lebanon’s political system divides power among its religious groups. The president must be a Maronite Christian, the prime minister a Sunni Muslim, and the parliament speaker a Shia Muslim.
Lebanon’s Economic Struggles
Lebanon’s economy has been struggling to recover since its financial collapse in 2019. The ongoing conflict between Hezbollah and Israel has made things worse, with the World Bank estimating that the war has cost the country $8.5 billion.
In October 2024, the UN warned that Lebanon’s economy could shrink by 9.2% in 2024 if the conflict continues. Between 2018 and 2021, the country’s economy shrank by 28%, its currency lost over 98% of its value, and people faced extreme inflation and reduced buying power.
A UN Development Program (UNDP) report stated that without strong international support, Lebanon’s economy will likely stay weak. Even if the conflict ends, the economy is expected to shrink by another 2.28% in 2025 and 2.43% in 2026.
Humanitarian Aid
This week, the Lebanese government and the UN announced an additional $371.4 million in emergency aid to help millions of people affected by the ongoing crisis.
Published: 10th January 2025
Also Read:
Sharjah transfers 20% Invest Bank share to Social Security Fund
FAB Issues Islamic Bonds Under $5B Program in Abu Dhabi
Saudi Arabia raises $12B through three-part bond sale
