RIYADH (Reuters) - Saudi Arabia is in discussions with the Lebanese government about providing financial support, Saudi Finance Minister Mohammed al-Jadaan said on Wednesday.

Saudi Minister of Finance Mohammed al-Jadaan speaks during an interview with Reuters at the Four Seasons hotel in Riyadh, Saudi Arabia September 18, 2019. REUTERS/Hadeel Al Sayegh

“We continue to believe and put our money and commitment in Lebanon, we’ll continue to support Lebanon and we are working with its government,” Jadaan said in an interview with Reuters.

A Lebanese official source said Prime Minister Saad al-Hariri “has been talking to the Kingdom of Saudi Arabia at a high level about support” and would stop in Riyadh on his way to France where he is due to meet President Emmanuel Macron on Friday.

Work is underway to convene a meeting in October of a high-level Lebanese-Saudi ministerial council that would witness the signing of agreements between the countries including investments in Lebanon, the Lebanese official source added.

The meeting, to be held in Saudi Arabia, would be chaired on the Lebanese side by Hariri and by a senior Saudi official.

Lebanon's dollar-denominated government bonds rose on the Saudi finance minister's comments. The 2029 issue XS1419879769=TE added 3.8 cents, its biggest daily gain on record, to reach 66 cents in the dollar . The 2037 issue XS1586230309=TE added 3.6 cents, also its largest daily climb, to 66.6 cents in the dollar, according to Tradeweb data.

One of the world’s most heavily indebted states, Lebanon is aiming to drive through long-postponed reforms to put the public finances on a sustainable path.

The impetus has grown due to a stagnant economy and a slow down in the inflow of hard currency from Lebanese abroad that has long been a key source of financing for the state and current account deficits.

“As a standalone Lebanon cannot survive as its financial ratios on debt to GDP etc are so awful, so it needs outside support,” said Tim Ash, senior emerging markets strategist at BlueBay Asset Management.

“I’m sceptical as there’s been talk about support from Saudi Arabia and Qatar before and it hasn’t materialized. Lebanon is not what it used to be and any Saudi Arabia support will likely come with strings attached: rein in Hezbollah’s influence.”

Saudi Arabia was a historic backer of the Lebanese state and mainly Sunni allies in Beirut. Ties between the two countries have been seen to improve recently, with Saudi Arabia lifting a travel advisory this year against its nationals visiting the country.

That follows a strain in relations in recent years as armed Shi’ite Hezbollah, backed by Riyadh’s regional enemy Tehran and part of Lebanon’s current coalition government, has grown in influence.