Demand for the dollar declined over the prior 2 weeks as reflected by the Lebanese pound’s peg against the dollar that went down from $/LP 1,510-1,514 with a mid-price of $/LP 1,512 to $/LP 1,509-1,513 with a mid-price of $/LP 1,511. Foreign assets (excluding gold) at the Central Bank dropped a monthly 0.37% from $38.87B at end-October to $38.73B by end-November. Meanwhile, the dollarization rate of private sector deposits stood at 65.72% in October compared to 66.13% in December 2013.
The euro tumbled against the greenback amid strong signs that the European Central Bank will soon start an outright money-printing. The euro weakened against the dollar by 1.77%, ending the prior 2 weeks at €/$ 1.2058.
Speculations that the Federal Reserve in the U.S will raise interest rates continued to reduce the demand for gold. The price of gold went down from $1,197.65/ounce on Thursday 18th of December 2014, to $1,181.60/ounce this week.
By Friday January 2nd, 2015, 12:30 pm Beirut time, the dollar-pegged LP appreciated against the euro going from €/LP1,850.46, the prior week, to €/LP 1,817.74. The Nominal effective exchange Rate (NEER) gained 0.97%, in the past 2 weeks, to 148.03points, where its year-to-date gain reached 0.48%.