$600 million Saudi loan to Lebanon

Lebanon has received a $600 million loan from Saudi Arabia meant to support the national currency and help Lebanon overcome its economic woes.

The first deposit of the money reached the Central Bank on Saturday and the remaining part was expected to be received by Monday.

Sources at the Central Bank did not specify the interest rate on the three-year loan but Prime Minister Rafik Hariri was quoted by Lebanese newspapers over the weekend as saying that the interest was five percent.

Hariri, a billionaire businessman who made most of his fortune in the construction business in the Saudi kingdom, reportedly said he was very "pleased" with the loan, which would have positive effects in strengthening the rate of the Lebanese pound to the dollar on the market.

The pound on Saturday continued to strengthen, selling at 1,523 to the dollar. The pound came under pressure in the summer as a result of political tension over the 1998 budget, which has yet to be approved by Parliament.

Foreign exchange reserves at the Central Bank have been decreasing, but the Saudi loan was expected to stop their steady drop.

Hariri, who holds Saudi citizenship, was quoted as saying the loan was a sign of Saudi "confidence" in Lebanon.