Lebanese Forex Market
The Lebanese Pound (LP) steadied during the past week within the range of $/LP 1,514 – 1,514.5 against the dollar, with a mid-price of $/LP 1,514.25.
The peg continues to be supported by the Central Bank’s solid foreign assets, which were further replenished to reach $38.70B by August 2019, largely thanks to BDL’s launched initiative by end-July which aimed to boost investors’ confidence mainly by re-incentivizing commercial banks to attract fresh dollars as deposits.
The dollarization ratio of private sector deposits increased slightly from 70.62% in Dec. 2018 to 71.73% in July 2019. It’s worthy to note that the average interbank rate stood at 5% in the week ending Sept.06th.
The Euro appreciated against the dollar-pegged LP to end the week at €/LBP 1,663.13 compared to last week’s €/LBP 1,662.14. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it slipped by a weekly 0.30% to stand at 119.98 points.
International Forex Market
The Euro/USD currency pair stood at €/USD 1.1032 in the week ending Sept. 06th, up from last week’s €/USD 1.1026. In fact, the Euro was dragged down this week with the PMI data on European Manufacturing contracting for 7 months in a row, but the currency rose back up on comments by Christine Lagarde that signaled a smaller than expected stimulus package next week. In its turn, the dollar weakened over the week as investors’ confidence was partly restored with the two economic giants setting a meeting in October to resolve trade tensions.
Accordingly, gold prices fell from last week’s $1,527.4/ounce to $1,523.5 this week.