Lebanese Forex Market
Demand for the dollar on the Lebanese forex market decreased over the past two weeks, going from $/LBP 1,514.5 on Dec.30th to a mid-price of $/LP 1,514 within the range $/LP 1,513.75 – 1,514.25 on Friday.
Foreign assets (excluding gold) at the Central Bank increased 9.75% since the beginning of the year to $40.71B by December 2016, boosted by the June 2016 Swap Operation coordinated by BDL with the MoF and Lebanese commercial banks. The dollarization ratio of private sector deposits lightly hiked from 64.88% in Dec.2015 to 65.30% in Nov.2016.
By Friday January 13, 2017, the euro appreciated against the dollar-pegged LP over the last two weeks, going from €/LBP 1,596.29 on Dec.30th to €/LBP 1,604.73 on Jan.13th. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it decreased by 0.01% over the last two weeks to stand at 118.40 points.
International Forex Market
The dollar slipped over the past 2weeks as traders’ concerns over Trump administration’s policies continued to dampen in the run to the Jan.20th inauguration. Traders resorted to safe haven assets, which reduced the dollar’s attractiveness.
Hence, the Euro gained ground against the dollar going from €/$ 1.0589 in the last two weeks to €/$1.0645 this week.
Over the past two weeks, gold prices increased from $1,160/ounce on Dec.30, 2016 to $1,197.7/ounce this Friday Jan.13th. Gold hit its highest $1,199.8/ounce since Nov.22nd on Thurs. Jan.12th as investors grew wary of Trump’s policies.