Lebanese Forex Market
The Lebanese Pound traded within the range of $/LP 1,514-1,514.5 against the dollar with a mid-price of $/LP 1,514.25 by the week ending May 18th, at the same range as last week.
The peg continues to be supported by the Central Bank’s solid foreign assets, which reached $43.4 billion in March 2018.
The dollarization ratio of private sector deposits grew from 65.84% in December 2017 to 68.44% in January 2018.
Over the past week, the Euro continued to further depreciate against the dollar-pegged LP going from €/LBP 1,798.90 to €/LBP 1,773.19 this week.
As for the Nominal Effective Exchange Rate (NEER) of the LBP, it recorded an increase of 1.10% to end the week at 113.23 points.
International Forex Market
In line with the surge in oil prices, the dollar continued to rally this week as concerns heightened regarding the impact of US sanctions on Iran and its oil production. Moreover, the euro continued to weaken against the dollar as reflected in the 1.43% downtick in the euro-dollar rate to €/$ 1.18 this week. This is mainly attributed to the possibility of a Eurosceptic government being formed in Italy, which mainly shattered investor confidence over the week.
Commodities
Gold prices dipped this week as the dollar bounced such that the price of an ounce of gold slipped from $1,324.45 to $1,287.4 by the week ending May 18th.