| 19/03/2021 | 12/03/2021 | %Change | YTD | |
| Euro / LP | 1,787.63 | 1,809.18 | -1.19% | -2.79% |
| Euro / Dollar | 1.1858 | 1.2001 | -1.19% | -2.79% |
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 19, 2021.
In turn, the dollarization ratio for private sector deposits increased from 76.02% in December 2019 to 80.37% in December 2020.
The Lebanese Lira continues its devaluation against the dollar in the parallel market and reached LBP15000/$. In details, the depreciation of the national currency can be explained by several reasons. First of all, the political instability is affecting negatively the whole economic environment, with the failure to form the awaited government. Furthermore, the decision makers of the country did not yet take any serious steps regarding the reforms requested by the IMF since Lebanon defaulted on Mach 2020. All this happening, while most of the Lebanese populations are suffering by witnessing their purchasing power collapses.
As for Euro/LBP currency pair, the Euro depreciated against the dollar-pegged LBP with the currency pair going from last week’s €/LBP 1,809.18 to €/LBP 1,787.63 by March 19,2021.
International Forex Market
The Euro/USD recorded a decrease from last week’s €/USD 1.2001 to €/USD 1.1858 by March 19, 2021. Investors are being bullish and are investing more in US stock market, which increase the governmental bond yields. In fact, the increase of yields is an indicator that the US economy is recovering from the pandemic. On the other side, Euro depreciated against the dollar amid concerns about further coronavirus lockdown in Europe.
Commodities
Gold price has bounced back in the end of this week and witnessed a remarkable increase by 2.08% to reach $1,734.4/ounce despite the increase in dollar. In details, gold price increased this week amid the expectation of the Fed that the inflation will hit 2.2%. In fact, gold is used to hedge against higher inflation. Our outlook for the upcoming weeks is that the gold price will continue to increase especially amid the recent political tension between the US and Russia.
In addition, Crude oil prices slumped this week by 9.79% to reach $62.85/Barrel. In details, the world is being more reasonable about the crude oil. The vaccination rollout is being slow and the global economic recovery still needs more time. However, our outlook is positive for crude oil, as demand will surge definitely amid the speed up of vaccination rollout worldwide.