|Euro / LP||1,717.25||1,725.91||-0.50%||0.50%|
|Euro / Dollar||1.1391||1.1449||-0.50%||0.51%|
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 February 11, 2022.
On a different note, the Lebanese pound was trading on the parallel market around 21,500LBP/USD as it endured a strengthening thanks to BDL’s intervention which is not sustainable without any financial and economic reforms.
This week, the government approved the State budget with a considerable deficit and it has been sent for discussion to parliament for approval. Furthermore, talks with the IMF have not reached a final decision yet and U.S urges Lebanon to resolve maritime border issue with Israel as US embassy declared that such an agreement could create a much-needed opportunity to help achieve prosperity for Lebanon’s future.
In turn, the dollarization ratio for private sector deposits decreased from 80.09% in October 2021 to 79.46% in December 2021.
As for the Euro/LBP currency pair, the Euro depreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 1,725.91 to €/LBP 1,717.25 by February 11, 2022. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound slightly decreased weekly by 0.04% to stand at 151.51 points on February 11,2022.
International Forex Market
The Euro/USD depreciated against the dollar from last week from €/USD 1.1449 to €/USD 1.1391 by February 11, 2022. Despite the euro zone is recovering strongly from the pandemic, challenges remain ahead as EU has to coordinate together to normalize the economic policy in face of elevated uncertainty, the pandemic as well as ongoing geopolitical tensions.
Gold price increased by 0.95% at the end of this week to $1,827.64/ounce. The high inflation rates are certainly affecting gold price. Meanwhile, the Fed is adjusting monetary policies to further control inflation as it is the main threat for the economy this year.
Crude oil prices went down this week by 1.41% to $91.14/Barrel after U.S and Saudi Arabia reaffirmed their commitment to insure stability for global energy supply. The talks came in high oil and fuel prices in an election year for the American administration and after OPEC agreed on increasing production by 400,000 barrels per day. Moreover, some positivity was seen as U.S-Iranian nuclear talks show some progress.
All options are at place to control oil prices; however shortages in supply, potential geopolitical events particularly Russia-Ukraine war as well as possible U.S sanctions on Russian’s oil exports could push prices to be more sensitive to any disruptions and 100$ per barrel could be inevitable at this point.