Lebanese Forex Market
To-date, the Lebanese Pound (LP) remained steady within the official range of US $/LP 1,514 to 1,514.5, with a mid- price of $/LP 1,514.25 by the week of November 27, 2020.
The peg to the US Dollar at the official rate continues to be supported by the Central Bank’s total foreign assets totaling $25.43B in October 2020. However, BDL intervenes by namely allowing small depositors to withdraw their dollar savings in LP at the rate of 3,900 while keeping the rate of conversion into US dollars at the “official rate”.
In turn, the dollarization ratio for private sector deposits increased from 76.02% in December 2019 to 80.22% in September 2020.
As for Euro/LP currency pair, the Euro appreciated against the dollar-pegged LP with the currency pair going from last week’s €/LBP 1,785.81 to €/LBP 1,795.10 by November 27, 2020. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP recorded a weekly increase of 7.87% to stand at 127 points over the same period.
International Forex Market
The Euro/USD went up from last week’s €/USD 1.1846 to €/USD 1.1908 by November 27, 2020. In fact, the positive news about corona virus vaccine has increased the risk appetite of investor by buying riskier currencies.
Gold prices went down this week by 3.04% to reach $1,810.57/ounce. In fact, investors are heading more to riskier assets after the positive news about corona virus vaccine announced by “Oxford” earlier this week. Meanwhile, Crude oil prices rose this week by 8.14% to reach $47. In fact, the recent news about vaccine has been bullish for the price, in hopes that vaccine will lead to a new normal and boost global travel. Further, OPEC leaders will meet in the upcoming month, with expectation that they will extend supply cuts until January next year.