by Donna-Abu-Nasr — bloomberg –– Lebanon’s caretaker economy minister said there are no plans to restructure debt after the finance minister was quoted as saying the move was being studied. “There’s definitely no restructuring for debt,” Raed Khoury said Thursday in a phone interview. “Bondholders and depositors are extremely safe.” Lebanese dollar bonds due 2028 plummeted after Al-Akhbar newspaper cited Finance Minister Ali Hasan Khalil as saying planned fiscal reforms include a debt overhaul. Yields jumped the most since the notes were issued in 2015. The minister didn’t immediately respond to questions sent by Bloomberg.

Caretaker Deputy Prime Minister Ghassan Hasbani also said he isn’t aware of any “tangible potential decisions” to restructure the country’s debt. “These are merely thoughts, but they require a full cabinet discussion and agreement around the budget,” Hasbani said. “No one should be reacting to individual ideas before they even get translated into comprehensive plans” that will need cabinet approval, he said.

Political turmoil and sluggish economic growth are prompting questions on how long Lebanon can avoid a financial meltdown that would further destabilize an area rattled by war in Syria and tension between Israel and Hezbollah. Lebanon is one of the world’s most indebted countries, with the debt to output issue at 153 percent in 2018. “There is no need for panic,” Khoury said. “The government is committed to pay its debt forever and not only for this year. It has the means to do that.” Khoury also said: “The ballooning of the debt definitely is something unhealthy and it’s a great pressure on our budget” “The servicing of the debt is becoming more than a third of the government budget” “The central bank has enough money to defend the Lebanese pound on one hand, and it has enough foreign reserves to give any bank in Lebanon which needs any liquidity in the future. This means our monetary system is controlled and it is safe” “We have to rethink our trade policies and agreements because what’s giving us a burden on our economy is the trade deficit. It’s about $16 billion-$17 billion negative” “The finance minister didn’t mean to cause panic and his words can be interpreted in different ways”