|Euro / LP||1,830.42||1,822.82||0.42%||-0.46%|
|Euro / Dollar||1.2142||1.2092||0.42%||-0.46%|
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 May 21, 2021.
This week, the exchange rate in the parallel market reached LL12,850 after the central bank launched the “Sayrafa” platform at the rate of LL12,000 early today. The platform aims to facilitate trade and facilitate commercial banks’ and licensed money changers’ purchasing of dollars, hoping to stabilize the unofficial exchange rate.
Moreover, this week, lockdown restrictions have eased as the national committee for COVID-19 met on Thursday, and decided to open up cinemas and theaters until 11 p.m. and to operate at 50 percent capacity, in addition to extending restaurant opening hours till 12:30 am.
In turn, the dollarization ratio for private sector deposits decreased from 80.37% in December 2020 to 80.24% in March 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 1,822.82 to €/LBP 1,830.42 by May 21, 2021. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP decreased by 0.33% since 14 April 2021 to stand at 138.99 points on 21 May 2021.
International Forex Market
The Euro/USD recorded an uptick from last week’s €/USD 1.2092 to €/USD 1.2142 by May 22, 2021.
This week witnessed Prominent US progressive Alexandria Ocasio Cortez criticizing the Biden administration’s support and has called Israel an “apartheid state” amid the ongoing bombing of the Gaza Strip. Moreover, on May 19, Alexandria Ocasio-Cortez, Mark Pocan, and Rashida Tlaib opposed the sale of $735 million in American-made weapons to the Israeli government calling for respect to basic Palestinian rights.
Moreover, on Tuesday, during President Biden’s visit to Dearborn, there were protests against Biden’s support of Israel in the wake of fighting between Israelis and Palestinians.
This weeks’ events continue to put the dollar under pressure, despite that adjusted initial claims were 444,000, a decrease of 34,000 from the previous week’s revised level, and they constituted the lowest level for initial claims since March 14, 2020. However, inflationary pressures of 4% annually are driving the demand pressure on the dollar.
Gold price increased at the end of this week and witnessed an uptick by 2.22% to reach $1,885.20/ounce. Gold prices gained on Thursday following rising U.S. inflationary pressure. Moreover, ANZ analysts added that weakening bond yield, building inflationary pressure and a softer dollar have brightened the prospects for gold investment demand.”
In addition, Crude oil prices decreased this week by 3.1% to reach $63.49/Barrel. Oil prices dropped as a result of surging COVID-19 cases in Asia which would affect the demand for oil and that U.S. inflation fears could prompt the Federal Reserve to slow economic growth with interest rate hikes.