Demand for the dollar strengthened over the week, as reflected by the Lebanese pound’s peg against the dollar that went from $/LP 1,509-1,513 with a mid-price of $/LP 1,511 to $/LP 1,512-1,513 with a mid-price of $/LP 1,512.5 this week. Foreign assets (excluding gold) at the Central Bank remained almost constant, decreasing by a monthly 0.01% to $37.86B by end-January. Meanwhile, the dollarization rate of private sector deposits stood at 65.68% in November 2014 compared to 66.13% in December 2013.
The Euro continued to depreciate as speculation rose that the Euro might weaken even more due to the hopeful bailout agreements between Greece’s Syriza and the ECB. The dollar benefitted from the strengthening of the American job market, as fewer Americans than forecasted filed jobless claims. In addition, the Russian and Ukrainian’s failed ceasefire might have placed additional pressures on foreign investors, causing the acceleration of the Euro weakening against the dollar at a higher rate by 0.90%,compared to last week’s 0.22%.The Euro/dollar rate ended the week at €/$ 1.1327.
Demand for gold decreased over the week as the dollar appreciated and resulted in the drop of gold prices from $1,222.20/ounce on Thursday 12th of February 2015 to $1,207.05/ounce this week.
By Friday February 20th, 2015, 12:30 pm Beirut time, the dollar-pegged LP appreciated against the Euro, going from €/LP 1,723.07 the prior week, to €/LP 1,707.55. The Nominal effective exchange Rate (NEER) gained 0.37% over the week to 158.85points, with its year-to-date gain reaching 7.83%.