Demand for the Dollar Steadied Over the Prior Week

Demand for the dollar steadied over the prior week as reflected by the Lebanese pound’s peg against the dollar that remained at $/LP 1,510-1,514 with a mid-price of $/LP 1,512, since last week. Foreign assets (excluding gold) at the Central Bank rose by a monthly 0.97% from $38.05B by August to $38.42B by end-September. Meanwhile, the dollarization rate of private sector deposits stood at 65.89% in August compared to 66.13% in December 2013.

The dollar continued its fall for the second week, where traders held off forecasts of a rise in US interest rates, after results showing weaker global economic growth. Thus, the euro gained 1.30% against the dollar, ending the week at €/$ 1.2835.

Gold held its first two-week increase since July due to speculation signs of a global slowdown headed by Europe. This drove a decline in the price of gold from $1,223.75/ounce last Thursday, to $1,238.70/ounce this week.

By Friday October the 17th, 2014, 12:30 pm Beirut time, the dollar-pegged LP depreciated against the euro going from €/LP 1,910.00, the prior week, to €/LP 1,934.88. The Nominal effective exchange Rate (NEER) fell marginally by 0.08%, weekly, to 138.62 points, with a 7.41% gain since year-start.

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