| 19/02/2021 | 12/02/2021 | %Change | YTD | |
| Euro / LP | 1,827.02 | 1,821.81 | 0.29% | – |
| Euro / Dollar | 1.2120 | 1.2085 | 0.29% | – |
| NEER Index | 124.32 | 124.58 | -0.21% | -0.42% |
Lebanese Forex Market
To-date, the Lebanese Pound (LBP) remained steady within the official range of USD/LBP 1,514 to 1,514.5, with a mid- price of USD/LBP 1,514.25 in the week of February 19, 2021.
In contrast, the LBP/US dollar exchange soared from LBP/USD 8,800 last week to LBP/US 9,500 in the parallel market on Friday February 19, 2021. However, BDL continues to support the peg of the Lebanese Lira to the US dollar at the official rate where it’s total foreign assets totaling $23.14B mid of February 2021.
In turn, the dollarization ratio for private sector deposits increased from 76.02% in December 2020 to 80.3% in November 2020.
The Lebanese Lira dropped further and quicker against the dollar this week, and surpassed the mentioned rate for the first time in 7 months. This major jump comes after Prime Minister-designate Saad Hariri and President Michel Aoun could not reach an agreement last week regarding the formation of the awaited Cabinet. Hence, Lebanon is driven to lose chances to unlock billions of dollars in aid that would carry it to safety.
As for Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week’s €/LBP 1,821.81 to €/LBP 1,827.02 by the 19th of February 2021. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP recorded a weekly downtick of 0.21% since 12February 2021 to stand at 124.32 points on 19 February 2021.
International Forex Market
The Euro/USD recorded an increase from last week’s €/USD 1.2085 to €/USD 1.2120 by February 19, 2021. The currency pair bounced this week amid the Fed’s promises to ease the situation and, where President Biden is working hard to promote the $1.9 trillion COVID-19 relief which may be approved as early as next week. While markets need more stimulus, applying this stimulus will likely increase the inflation and eventually depreciate the US dollar.
Commodities
Gold price has slumped this week by 2.9% to hit an 8-month low of $1,769.9/ounce. However, this downside on gold prices is a result of an optimism of the stimulus package and the vaccination drive. In turn, the US treasury yield, that had rose this week, indicating a recovery in the US economy and possibly a strengthening of the dollar. Consequently, global economy recovery will guide gold prices in the upcoming period.
As such, Crude oil prices rose this week by 4.6% to reach $63.44/Barrel. The reason for this increase is not only the rollover of the vaccination and the stimulus package, but the freezing weather in the State that led to a decline of 30% of oil production this week.