One market decidedly unmoved by the election results was the local foreign exchange market. The Lebanese pound was unchanged in interbank trading at LP1,513.75-14.25.
Although the possible return of Rafik Hariri as prime minister would be welcomed by many in the market in preference to a continuation of the outgoing government, there are reservations as to how much he could actually accomplish given likely political restrictions that would be placed on him.
The ability of any government to tackle the fiscal and debt problems could be seriously curtailed by conflicting political interests. The consequences, however, of failing to move on measures outlined by rating agencies S&P and Moody’s would be serious in the extreme. Such a failure would likely result in intense pressure being applied on the local currency.
Nominal TB subscriptions edged up slightly by 0.12 percent to LP384.29 billion ($254.92 million), while maturing bills fell 5.8 percent at the August 31 auction to LP292.52 billion ($194.04 million).
Although the level of TB subscriptions is expected to remain relatively stable in the coming few weeks, as banks have no other alternative to roll-over their maturing bills, some change in subscription levels and patterns may take place as the new cabinet is appointed and its economic policy revealed.
The pattern of subscriptions was similar to the previous week, with the share of 24-M TB almost steady at 62 percent, while that of the 12-M TB rose 3 percentage points to 21 percent. The short-term TBs saw their share lose 2 points to 17 percent. No sale of CDs was registered this week. — ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com )