Lebanese Pound Appreciated Against the Dollar to $/LP 1,505

Demand for the dollar in the Lebanese Forex market declined during the week as the Lebanese pound’s peg against the dollar went from 1,506–1,510 with a mid-price of $/LP 1,508 to $/LP 1,503–1,507 with a mid-price of $/LP 1,505. Foreign assets (excluding gold) at the Central Bank grew by a monthly 0.7% to reach $38.86B at the end of June. As for the dollarization rate of private sector deposits, it slid from 65.71% in December 2014 to 65.15% by May.

The euro recovered against the dollar by 0.51% to stand at €/$ 1.0942, on Friday 24th of July. This probably came after Athens avoided default on the ECB by tapping into a 7 billion-Euro bridge loan, which might have put food for thought about the improvement of the situation in Europe. 

Gold continued its bearish trend over the week, as the prices dropped from last week’s $1,143.96/ounce to $1,079.46/ounce today at 12:30 pm, Beirut time. This is possibly due to the world’s largest gold producer (China) stockpiling gold reserves at a slower pace than previously thought, keeping gold investors on their toes. Furthermore, a strong dollar might be holding the yellow metal as well.

By Friday 24th of July, 2015, 12:30 pm Beirut time, the dollar-pegged LP depreciated against the euro going from €/LP 1,641.22 to €/LP 1,649.51. The Nominal effective exchange Rate (NEER) increased by a weekly 0.09% to 165.97 points, bringing its year-to-date gains to 12.66%. 

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