| 05/03/2021 | 26/02/2021 | %Change | YTD | |
| Euro / LP | 1,794.46 | 1,829.43 | -1.91% | -2.42% |
| Euro / Dollar | 1.1904 | 1.2136 | -1.91% | -2.42% |
| NEER Index | 126.34 | 125.48 | 0.69% | 1.20% |
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 March 05, 2021.
In turn, the dollarization ratio for private sector deposits increased from 76.02% in December 2020 to 80.37% in December 2020.
On Tuesday, new wave of protesters began and closed several major roads as the situation worsens with no progress on the formation of a new Cabinet. In turn, the LBP/US dollar exchange recorded a low level since summer. According to money exchangers, the exchange rate touched the threshold of 10,000 in the black market on Friday, 05 March. 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 continuing to decline and reached $22.89B end of February 2021.
Lebanon has been hit by one crisis after another. What is happening in the black market is out of control. As such, prices have skyrocketed recently pushing people to buy more of subsidized items. In addition, fistfights took place this week at several supermarkets in Beirut over the purchase of subsidized goods where groceries have started setting restrictions on how much people purchase amid limited supplies and fear of food securities.
As for Euro/LBP currency pair, the Euro depreciated against the dollar-pegged LBP with the currency pair going from last week’s €/LBP 1,829.43 to €/LBP 1,794.46 by March 05,2021. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP recorded a weekly uptick of 0.69% since 26 February 2021 to stand at 126.34 points on 5 March 2021.
International Forex Market
The Euro/USD recorded a decrease from last week’s €/USD 1.2136 to €/USD 1.1904 by March 05, 2021. The Euro Falls as the US dollar soared the most in a month and jumped overnight after the announcement of the Federal Reserve Chair Powell about the violent sell-off in Treasuries last week that was notable and may push long term rates so high that the Fed might have to intervene. Moreover, he restated a commitment to maintain ultra-easy monetary policy until the economy is very far along the road to recovery.
Commodities
Gold price has slumped this week by 3.83% to hit a 10-month low of $1,695.45/ounce. Gold suffered further losses amid weak global cues. In fact, it is trading lower on economic growth optimism due to higher US bond yields and positive economic outlook. As such, this situation has drawn investors out of the safe haven to dollar and equities which decreased the demand for gold.
In addition, Crude oil prices rose this week by 2.38% to reach $67.98/Barrel, amid further tightening of the production cuts and better growth prospects.