|Euro / LP||1,772.43||1,787.63||-0.85%||-3.62%|
|Euro / Dollar||1.1757||1.1858||-0.85%||-3.62%|
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 26, 2021.
In turn, the dollarization ratio for private sector deposits decreased from 80.37% in December 2020 to 80.20% in January 2021.
The Lebanese Lira continues its devaluation against the dollar in the parallel market and reached highs of LBP13,000/$ and lows of LBP12,000/$, as the situation in Lebanon is becoming irrevocable and the latest government formation unsuccessful efforts disrupted any serious attempts to constructively solve the crisis.
Moreover, this week a private sector pharmaceutical company had announced its assistance to the country’s national COVID-19 vaccination program, with the arrival of 50,000 doses of Sputnik V by Friday morning. This initiative will help to secure Sputnik V vaccines for employees and their families in the coming weeks. In addition, Health Minister Hamad Hasan has also announced the arrival of 750,000 Pfizer-BioNTech vaccines arriving during May and June along with other vaccine rollout. This gives some hope on overcoming the adverse health situation ranging in the country. Moreover, World Bank’s study over food price inflation in Middle East and North Africa region had showed that prices in Lebanon are the highest in the region and prices have surged across all food categories between Feb. 14, 2020 and March 8, 2021. In details, the main food category of cattle meat indicated an increase of 110% in the said period.
As for Euro/LBP currency pair, the Euro depreciated against the dollar-pegged LBP with the currency pair going from last week’s €/LBP 1,787.63 to €/LBP 1,772.43 by March 26, 2021.
International Forex Market
The Euro/USD recorded a decrease from last week’s €/USD 1.1858 to €/USD 1.1757 by March 26, 2021. In fact, the increase of bond yields is an indicator that the US economy is recovering from the pandemic.
Euro depreciation continues to be triggered by the pandemic, due to the lack of supply of vaccines and a year of lingering lockdowns. Moreover, US has continued with its Rescue Plan, distributing stimulus payments for people suffering from income losses, totaling about 100 million payments.
Gold price has fallen end of this week and witnessed a downtick by 0.33% to reach $1,728.59/ounce despite the increase in dollar. In details, prices have bowed following a sharp spike in trading on Sunday evening. Additionally, the FOMC announced $700 billion in new bond purchases aimed at supporting the US economy as the country comes together to battle the spread of Covid-19.
In addition, Crude oil prices increased this week by 2.59% to reach $64.48/Barrel. However, the third wave of coronavirus lockdowns in Europe will most probably weigh heavily on the oil, adding to the OPEC’s meeting that is coming up on April 1. Moreover, it is expected that OPEC will hold its oil production steady, however, the uncertain nature of the meeting has put traders on edge as they watch for signs that would give clues to OPEC’s strategy as it tries to keep the market in balance and prices at optimum levels.