Slightly Higher Demand for the Dollar on the Lebanese Forex Market

Lebanese Forex Market:

Demand for the dollar on the Lebanese forex market increased as the exchange rate rose from at $/LP 1,510-1,514 with a mid-price of $/LP 1,512 to $/LP 1,510.5-1,514.5 with a mid-price of $/LP 1,512.5. Foreign assets (excluding gold) of the Central Bank dropped by a monthly 1.34% to reach $37.74B at the end of October 2015. As for the dollarization rate of private sector deposits, it slid from 65.71% in December 2014 to 64.96% by August this year.

By Friday 13th of November, 2015, 15:30 pm Beirut time, the dollar-pegged LP appreciated against the euro as the exchange rate slid by 1.02% from €/LP 1,637.90 to €/LP 1,621.17. As for the Nominal effective exchange Rate (NEER), it increased by a weekly 0.18% and by 14.38% since year-start to 168.50 points.

International Forex Market:

The euro registered new losses against the dollar, falling by a weekly 1.02% to €/$ 1.0754. Over the past week, the US Dollar was supported by the probability of the Federal Reserve increasing rates in December and by stronger non-farm payrolls which increased by 271,000 in October. As for the euro, it suffered losses after weak economic growth data was released.  Growth in the euro-area fell from 0.4% in the second quarter of 2015 to 0.3% in the third quarter. This weak growth makes it more likely for the ECB to engage in more stimulus which would push the euro further down.  


With a stronger dollar, demand for safe-haven assets such as gold dropped. The price of the metal fell from last week’s $1,105.61/ounce to $1,083.11/ounce.


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