| 28/01/2022 | 21/01/2022 | %Change | YTD | |
| Euro / LP | 1,676.68 | 1,706.56 | -1.75% | -1.87% |
| Euro / Dollar | 1.1122 | 1.1320 | -1.75% | -1.87% |
| NEER Index | 153.26 | 151.69 | 1.04% | 2.26% |
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 January 28, 2022.
The Lebanese Pound remained steady for the second consecutive week following BDL decision to inject dollars into the market through Sayrafa platform. In turn, the national currency ended up the week at the rate of 22,400 LBP/USD on the parallel market.
On a further note, IMF negotiations took off this week drawing a potential rescue package for Lebanon and paving the way for other potential international donors, however the political vacuum and corruption in Lebanon remains the most essential and fundamental issues.
In turn, the dollarization ratio for private sector deposits decreased from 80.09% in October 2021 to 79.96% in November 2021.
As for the Euro/LBP currency pair, the Euro further depreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 1,706.56 to €/LBP 1,676.68 by January 28, 2022. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound increased weekly by 1.04% to stand at 153.26 points on January 28,2022.
International Forex Market
The Euro/USD depreciated against the dollar from last week €/USD 1.1320 to €/USD 1.1122 by January 28, 2022. The Euro dropped the most during this week while the post-Fed decision pressured the major currency pair. Meanwhile, with the growing alarming sounds concerning Russia-Ukraine tensions, the road ahead the European economy is shaky. The implication from this confrontation would be spreading beyond just western Europe and weigh on the euro currency as well as leads to a severe hit-back and economic confrontation for the EU.
Commodities
Gold price decreased by 2.55% at the end of this week to $1,786.9/ounce. In fact, the price of gold always reflects multiple scenarios. As the Fed insured interest rates hikes in the near future, US 5-Y Treasury yields went up and dollars soared pushing the gold to be traded at a softer rate. In turn, tighter monetary policy means financial volatility and economic uncertainty.
Crude oil prices jumped this week by 4.16% to $87.41/Barrel. Oil prices are bouncing back from the lows seen at the beginning of the pandemic while stronger demand is remarkably noticed and yet no end for the Iranian nuclear talks in sight. However, the rising demand and shortages might lead to a need for Iranian oil to cool down the prices, but sanctions aren’t lifted yet and uncertainty over the pace of the energy transition and supply are clearly adding further pressure on the market.