Demand for the dollar in the Lebanese Forex market remained stable during the week as the Lebanese pound’s peg against the dollar steadied at $/LP 1,507-1,511 with a mid-price of $/LP 1,509 on the 12th of June. Foreign assets (excluding gold) at the Central Bank increased by a monthly 2.28%, from $37.73B by end-April to $38.59B by end-May. Meanwhile, the dollarization rate of private sector deposits stood at 65.30% in April 2015 compared to 65.71% in December 2014.
The Euro depreciated by 0.85% against the dollar, during the week, to €/$1.1163 compared to €/$1.1259 on the 5th of June. This might be due to the ongoing problems between Greece and its creditors as its becomes more evident that an aid agreement between the two parties won’t be resolved any time soon. Reports linger that continued firmness from the Greeks will only cause their creditors to withdraw their financial support to Athens by the end of this month.
Gold went into a slight upward correction of 0.38% this week, despite the appreciating dollar and investors swaying into equity markets in China following the new adopted stimulus program. This has followed a bearish three-week run that ended in a 3.3% decline. It looks like there is a resistance level between $1,170/ounce and $1,175/ounce. Hence, the price of gold went up to $1,180.34/ounce from $1,175.88/ounce on the 5th of June 2015.
By Friday 12h of June, 2015, 12:30 pm Beirut time, the dollar-pegged LP appreciated against the euro going from €/LP 1,697.29 on the 5th of June to €/LP 1,682.82. The Nominal effective exchange Rate (NEER) went up by 0.17% to 164.02 points, narrowing its year-to-date gains to 11.34%.