Euro Depreciates this Week as ECB Keeps Interest Rates Unchanged


Lebanese Forex Market

Demand for the dollar on the Lebanese forex market improved over the past week, where the value of the Lebanese pound against the dollar rose from a mid-price of $/LP 1,514 within the range of $/LP 1,513.75 -1,514.25 to a mid-price of $/LP 1,514.25 within the range of $/LP 1,514 -1,514.50.

Foreign assets (excluding gold) at the Central Bank increased 9.46% since the beginning of the year to $40.60B by September 2016, boosted by the recent swap executed by BDL with the MoF and Lebanese banks. The dollarization ratio of private sector deposits fell from 64.88% in December 2015 to 64.76% in August 2016.

By Friday the 21st of October 2016, the euro depreciated against the dollar-pegged LP over the last week, dropping from €/LBP 1,661.57 to €/LBP 1,640.16. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it rose by 0.21% to reach 265.42 points.

International Forex Market:

The euro weakened this week as the European Central Bank kept its interest rates unchanged at record lows of zero and the deposit facility rate at -0.4%, which is the interest rate received by banks against depositing money at the Central Bank overnight. Hence, the euro depreciated against the dollar with the euro/dollar exchange rate dropping from €/$1.1022 to €/$1.088, this week.


Over the past week, gold prices rose from $1,249.58/ounce to $1,264.56/ounce this week.


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