Demand for the dollar, in the Lebanese’s FOREX market, steadied over the week, as reflected by the Lebanese pound’s peg against the dollar that remained at $/LP 1,510-1,514 with a mid-price of $/LP 1,512. Foreign assets (excluding gold) at the Central Bank rose by a monthly 2.71% to $38.89B by end-February. Meanwhile, the dollarization rate of private sector deposits stood at 65.51% in January 2015 compared to 65.71% in December 2014.
After falling to an 11.5 year low against the dollar last Thursday,the Euro/Dollar continued to fall ending the week at €/$1.0608 from €/$1.0967 previously. This was triggered by the ECB’s official stimulus program of 60B Euros/month entered into effect as of Monday, as such flooding the market with Euros.
As the price of Brent crude oil experienced another downturn week of 4.15% to $55.83/barrel, gold prices dropped to $1,155.90/ounce this week compared to $1,198.20/ounce on Thursday 5th of March. The dollar appreciating on a weekly basis, as well as the downward trend of global prices constituted a “bearish cocktail” for gold.
By Friday March 13th, 2015, 12:30 pm Beirut time, the dollar-pegged LP appreciated against the Euro, going from €/LP 1,653.28 the prior week, to €/LP 1,599.16. The Nominal effective exchange Rate (NEER) gained 1.87% over the week to 164.67 points, with its year-to-date gain reaching 11.78%.