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 April 16, 2021.
Meanwhile on the black market, the exchange rate of the Lebanese pound against the dollar has been stable and showed no major fluctuation for the week ending April 23, 2021. In fact, the dollar has been traded for around 12,100 LBP/USD during this week.
Overall, the situation in Lebanon is still the same. From the failure to form a new government to the uncontrolled smuggling of subsidized food products, Lebanon had not begun yet with the needed reforms.
In turn, the dollarization ratio for private sector deposits decreased from 80.37% in December 2020 to 80.04% in February 2021.
As for Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week’s €/LBP 1,802.62to €/LBP 1,815.03 by April 23, 2021. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP soared by 9.85% since 16 April 2021 to stand at 139.87 points on 23 April 2021
International Forex Market
The Euro/USD recorded an uptick from last week’s €/USD 1.1958 to €/USD 1.2040 by April 23, 2021. The Euro appreciated and surpassed the barrier of 1.2000 against the dollar. The look on Euro is set to rise amid the acceleration in economic growth in Europe due to the vaccination rollout. On the other hand, we expect that with countries speeding up their vaccinations and Fed pricing stabilizing, the dollar can turn lower.
Gold price increased at the end of this week and witnessed an uptick by 1.10% to reach $1,785.57/ounce. In the same token, the silver also added 4.86% and hit $26.09/ounce. Both the precious metals, gold and silver, showed solid strength this week in the international markets and settled on a positive note amid weakness in the dollar index.
In addition, Crude oil prices decreased this week by 2.75% to reach $65.35/Barrel. The prices of Crude oil tend to decrease during periods of higher volatility and uncertainty in financial markets. In turn, this uncertainty in financial markets decreases the demand for energy and it implies that the time recovery of global economy is still unknown.