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 $38.7B by August 2019, which is mainly attributed to BDL’s end-July initiative that aimed to boost investors’ confidence in Lebanon 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 12% by Sept.19th, compared to last week’s 5%.
The Euro depreciated against the dollar-pegged LP to end the week at €/LBP 1,647.77 compared to last week’s €/LBP 1,658.76. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it rose by a weekly 0.42% to stand at 119.34 points.
International Forex Market
The Euro/USD currency pair stood at €/USD 1.0930 by Sept. 27, down from last week’s €/USD 1.1003. The euro dropped to a more-than-two-year low versus the U.S. dollar Friday, after data showed Eurozone economic sentiment plunged as trade tensions depressed confidence in the industry. The bloc’s monthly indicator of the economic sentiment fell in September to its lowest level in nearly five years to 101.7 points from 103.1 in August, in a new sign of slowing economic activity. Moreover, the German Manufacturing PMI read at 41.4 in September its lowest level since October 2012 which indicates that the largest economy in the Eurozone is likely to fall into recession in the third-quarter of 2019.
In turn, international gold prices fell from last week’s $1,501.7/ounce to $1,496.6/ounce this week.