November 8, 2017 / 10:59 AM / a year ago

Lebanese bond sell off widens as political crisis swirls

LONDON, Nov 8 (Reuters) - A sell off in Lebanese bond markets escalated on Wednesday, with more of its debt dragged into the rout as its political crisis deepened.

Lebanon’s June 2020 issue dropped 2.6 cents to 95.3 cents in the dollar, the lowest since the bond was issued in June 2013 according to Reuters data.

Its April 2020 issue also fell to its lowest ever level as it dropped 2.4 cents to 94.9 cents in the dollar.

Lebanon has been thrust to the centre of regional rivalry between Saudi Arabia and Iran since the Saudi-allied Lebanese politician Saad al-Hariri quit as prime minister on Saturday, blaming Iran and Hezbollah in his resignation speech.

On Monday Saudi Arabia accused Lebanon of declaring war against it because of aggression by the Iran-backed Lebanese Shi’ite group Hezbollah, a dramatic escalation of a crisis threatening to destabilise the tiny Arab country.

Rating agency Moody’s warned on Tuesday that reopening Lebanon’s political vacuum would damage the tiny country’s credit rating. (Reporting by Claire Milhench; editing by Marc Jones)

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