Demand for the Dollar Strengthened on the Lebanese Forex Market

Demand for the dollar in the Lebanese Forex market strengthened during the week with the exchange rate moving within the peg range from $/LP 1,505–1,509 with a mid-price of $/LP 1,507 to $/LP 1,508–1,512 with a mid-price of $/LP 1,510. Foreign assets (excluding gold) at the Central Bank dropped by a monthly 0.57% to reach $38.59B at the end of August. As forthe dollarization rate of private sector deposits, it slid from 65.71% in December 2014 to 65.08% by June.

By Friday 4th of September, 2015, 11:30 pm Beirut time, the dollar-pegged LP appreciated against the euro going from €/LP 1,702.42 to €/LP 1,679.66. The Nominal effective exchange Rate (NEER) added a weekly 0.34% to 167.11 points, bringing its year-to-date gains to 13.43%.

International Forex Market:

The euro depreciated by 1.34% against the dollar to €/$ 1.1142. The Euro was mainly affected by the European Central Bank (ECB) cutting its economic forecasts and signaling it may expand stimulus.

Commodities:

The price of gold declined from last week’s $1,126.86/ounce to $1,123.86/ounce. Demand for the safe haven decreased for the second week in a row as the ECB implied that it might increase stimulus.

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