Lebanon’s sovereign dollar bonds reached a new two-year high on Tuesday as investors speculated that the ceasefire talks with Israel could improve the country’s economic outlook.
Despite still trading below 10 cents on the dollar, the bonds recorded a 3% increase this week, with the 2031 maturity reaching 9.3 cents, its highest value since May 2022, Reuters reported.
“This agreement is designed to be a permanent ceasefire,” US President Joe Biden told reporters. The ceasefire took place at 4 am on Wednesday, with both countries being given 60 days to implement the agreed changes.
Global oil and gold prices have also fallen this week on geopolitical optimism.
The rally is driven by hopes that a ceasefire could stimulate Lebanon’s political system and renew efforts to address the country’s default. The cost of physical damages and economic losses due to the conflict in Lebanon is estimated to have reached $8.5 billion, according to World Bank data.
