Dollar Rises as Fed Increased Interest Rates
Lebanese Forex Market
Demand for the dollar on the Lebanese forex market declined over the past week, going from a mid-price of $/LP 1,514.25 within the range $/LP 1,514-1,514.5, to a mid-price of $/LP 1,514 within the range $/LP 1,513.75-1,514.25 on Friday.
Foreign assets (excluding gold) at the Central Bank increased 8.56% since the beginning of the year to $40.27B by November 2016, boosted by the recent swap executed by BDL with the MoF and Lebanese banks. The dollarization ratio of private sector deposits increased from 64.88% in December 2015 to 65.10% in October 2016.
By Friday the 16th of December 2016, the euro depreciated against the dollar-pegged LP over the last week, going from €/LBP 1,601.87 to €/LBP 1,577.30. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it increased marginally by 0.81% to reach 118.97 points.
International Forex Market:
The euro weakened against the dollar this week, falling from €/$ 1.0626 last week, to €/$1.0463 this week, after the Federal Reserve’s interest rate hike on the 14th of December.
Commodities:
Over the past week, due to a stronger dollar, gold prices decreased from $1,170/ounce last week, to $1,133/ounce on Friday.
