| 26/02/2021 | 19/02/2021 | %Change | YTD | |
| Euro / LP | 1,829.43 | 1,821.81 | 0.42% | – |
| Euro / Dollar | 1.2136 | 1.2085 | 0.42% | – |
| 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 26, 2021.
In contrast, the LBP/US dollar exchange soared from LBP/USD 9,500 last week to LBP/US 9,700 in the parallel market on Friday February 26, 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 80.37% in December 2020.
The situation in Lebanon is becoming dangerous as the huge depreciation in Lebanese lira against the dollar is eroding the Lebanese purchasing power. In fact, most of the Lebanese employees are being paid in Lebanese pound (more than 95%), which leave them in a very hard situation due to the huge increase in inflation rate. Our outlook for Lebanese lira is negative as we expect a further deterioration in the national currency, amid the irresponsible political deadlock.
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 1,829.43 by the 26th of February 2021. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP recorded a weekly downtick of 0.51% since 12 February 2021 to stand at 125.48 points on 26 February 2021.
International Forex Market
The Euro/USD recorded an increase from last week’s €/USD 1.2085 to €/USD 1.2136 by February 26, 2021. The US dollar continues to remain broadly weaker, as the stimulus and vaccine-optimism-driven expectations of a quick global economic recovery, leaving investors to become bullish by investing more in non-safe haven currencies.
Commodities
Gold price has slumped this week by 0.39% to hit an 8-month low of $1,763/ounce. In fact, the global vaccination rollout, and the decrease in coronavirus cases, left investors more optimism, which decreased the demands on gold, and raised the appetite of the investors to a more riskier asset. However, inflation rate might increase amid the promise of stimulus plans by President Joe Biden which will push gold price forward in the near future. For those looking to buy gold at great prices, the current price seems to be a good opportunity to do so.
As such, Crude oil prices rose this week by 4.67% to reach $66.44/Barrel, amid further tightening of the production cuts.