Modest activity for Lebanon’s foreign exchange market
Heading towards year-end, the local foreign exchange market stood relatively quiet with the limited demand for US dollars being absorbed comfortably by banks, thus allowing the Central Bank to remain on the sidelines. The reduced demand for the US dollar helped the Lebanese pound to strengthen slightly, appreciating in interbank trading from LP1,513-14 last week to close at LP1,512.5-13.5.
Purchase subscriptions of TBs declined 31.7 percent to LP418.37 billion ($277.52 million) at the December 7th auction as the amount of TBs maturing dropped 39.7 percent to LP279.26 billion ($185.25 million), thus resulting in an LP139 billion ($92.20 million) surplus. Banks resorted to secondary market purchases where prices are below official auction figures, but supply was very limited. The Central Bank may have intervened to a limited extent to cover the lower sales as banks’ purchases dropped.
The pattern of TB subscriptions changed on December 7th from the week before, recovering its normal trend as the 24-M TB attracted the largest portion of purchases. The 2-year bill accounted for 44.1 percent of subscriptions, up from 25.9 percent, while the 12-M TB’s share was down to 28.2 percent from 51.8 percent last week. The short 6-M and 3-M maturities represented a total of 27.7 percent of purchases.
The Central Bank sold LP13 billion ($8.62 million) worth of certificates of deposit this week at steady interest rates. 45-day CDs accounted for LP11 billion ($7.30 million), while 60 and 364-days CDs represented LP1 billion. ¯ ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com)