Lebanese Forex Market
Demand for the dollar slightly rose on the Lebanese Forex market with the value of the Lebanese Pound trading within the range of $/LP 1,514 – 1,514. 5 with a mid-price of $/LP 1,514.25 compared to a range of $/LP 1,513.75 – 1,514.25 with a mid-price of $/LP 1,514 last week.
Foreign assets (excluding gold) at the Central Bank reached $40.09B at the end of March 2017 compared to $36.59B in the same period last year.
The dollarization ratio of private sector deposits rose from 64.7% in February 2016 to 65.9% in February 2017.
By Friday April 21st, 2017, the euro appreciated against the dollar-pegged LP going from €/LBP 1,602.92 on April 7th to €/LBP 1,616.04, this week.
As for the Nominal Effective Exchange Rate (NEER) of the LBP, it declined by 0.66% over the past two weeks to stand at 116.64 points.
International Forex Market:
The euro/dollar rose by 0.82% to €/$ 1.0720 over the mentioned period. The euro strengthened as the agitation eased this week on round 1 of the French elections scheduled for Apr.23rd. Meanwhile, the dollar weakened as investors’confidence was eroded by the White House’s failure to pass promised reforms to the US Healthcare system. Moreover, the IMF this week explained in its flagship report on the world economy optimistic growth rates of the US economy may not fully materialize if the administration’s legislative efforts continue to face obstacles, like the resistance faced on healthcare reforms and the heightened protectionism.
Over the week, gold prices rose from $1,265.30/ounce to $1,283.15/ounce this week mainly due to the recent geopolitical tensions arising especially between the US and North Korea as well as the easing interest rate hike expectations.