| 09/09/2022 | 02/09/2022 | %Change | YTD | |
| Euro / LP | 1,516.64 | 1,498.32 | 1.22% | -11.24% |
| Euro / Dollar | 1.0061 | 0.9939 | 1.22% | -11.23% |
| NEER Index | 169.45 | 169.87 | -0.25% | 13.06% |
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 by September 09, 2022.
On the parallel market this week, the Lebanese national currency has fluctuated between a minimum of LBP/USD 34,600 and a maximum of 35,500 ending the week at LBP/USD at lower levels of LBP/USD 35,200 on Friday afternoon.
Risks to the long term exchange rate expectation in Lebanon remain pointed to the downside given the country’s persistent political and economic crises. In fact, Central Bank’s monetary policy seems to be unorthodox as pressures continued to weigh on the Lebanese currency. Meanwhile, despite the robust performance of the country’s tourism sector, inflows are still considered to be limited compared to a country that relies quasi-totally on the importation, thus, it has pulled down the Central Bank’s foreign reserves considerably resulting in a noticeable fall in the exchange rate during summer months. Equally, if the next presidential elections result in social unrest due to controversial results or political deadlock, a crisis could deepen under full absence of reforms.
As for the Euro/LBP currency pair, the Euro appreciated slightly against the dollar-pegged LBP with the currency pair going from last week €/LBP 1,498.32 to €/LBP 1,516,64 by September 09, 2022. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound slightly decreased marginally by 0.25% weekly to stand at 169.45 points on September 09, 2022.
International Forex Market
The Euro has regained its parity against the dollar by the end of the week and closed at $1.0061. In fact, the dollar index which tracks the greenback against six major currencies has gradually lost its position during this week and traded 0.43% lower at 109.04 ahead of the ECB meeting earlier this week. The European Central Bank has declared hikes interest rates by record 75 bps, the biggest single hike since 1999 but the elevated energy prices and the war in Ukraine would remain major concerns for the Eurozone during the next winter.
Commodities
Gold prices increased by 0.96% this week, to $1,727.86/ounce inversely to the green currency trend. However, the hints of the Fed’s Chair Jerome Powell about further increase in interest rates to cooldown the inflation would make the dollar more attractive for investors and, consequently, gold prices would drop due to the inverse correlation between the greenback and the yellow metal.
Crude oil prices declined sharply this week by 2.01% to reach $85.12/barrel. The oil prices recorded a drop despite a small production cut by the OPEC and allies as well as the US energy information administration on Thursday stated that the US crude production is anticipated to increase by 540,000 bpd to 11.79M bpd by the end of 2022.