| 04/06/2021 | 28/05/2021 | %Change | YTD | |
| Euro / LP | 1,819.01 | 1,830.18 | -0.61% | -1.08% |
| Euro / Dollar | 1.2066 | 1.2140 | -0.61% | -1.08% |
| NEER Index | 139.84 | 138.99 | 0.61% | 11.33% |
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 June 04, 2021.
The national currency continues its unprecedented devaluation and witnessed the worst performance during this week to USD/LBP 13,500. This week a court decision has prohibited the banks to pay at the rate of 3,900 and forced them to pay based on the currency of deposits. In fact, banks are not capable of paying the deposits in dollar, which will obligate them to pay at the official rate 1,507.5. This decision has made the depositors angry as many of them have taken to the street to protest against this decision. The Lebanese president had a meeting on Thursday with the governor of BDL and the head of court, and decided to continue to work by the circular 151, and pay the depositors in foreign currency at the rate of 3,900.
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 depreciated against the dollar-pegged LBP with the currency pair going from last week’s €/LBP 1,830.18 to €/LBP 1,819.01 by June 04, 2021. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP increased by 0.61% since 28 May 2021 to stand at 139.84 points on 04 June 2021.
International Forex Market
The Euro/USD recorded a downtick from last week’s €/USD 1.2140 to €/USD 1.2066 by June 04, 2021. Beside the strong dollar, the robust US economic rebound is not happening without consequences. In fact, the stimulus plan adapted by the Federal Reserve could back fire into the U.S. economy as it could increase inflation in a way that can hurt the economy.
Commodities
Gold price decreased at the end of this week and witnessed a downtick by 1.07% to reach $1,872.16/ounce, despite the inflation concerns. The US jobless claims dropped to a low level this week, as this is a good indicator that US economy is in its way for a long recovery. However, we except gold price to surge in the upcoming weeks, as the inflation expectation will spike amid other potential stimulus plans.
In addition, Crude oil prices increased this week by 2.62% to reach $71.62/Barrel. This increase was expected as the post pandemic level is witnessing a high demand. Furthermore, the surge of inflation level will increase the price of energy. Our outlook remains positive for the oil price, as it may witness a further increase in the upcoming week, pending on inflation level, and the pandemic situation.