Amid indications of a cautious calm in the Middle East led by diligent diplomatic efforts to conclude an initial agreement to contain the American-Iranian conflict, and while the Israeli escalation continues on various Lebanese territories, while attention is turning to the meetings of the Financial Action Task Force (FATF) starting next Monday, during which the extent of commitment will be assessed. Lebanon By implementing the reforms required to exit the gray list and avoid being included on the black list, the Lebanese financial markets witnessed net sales this week in the Eurobond market, while the stock market returned to its upward path, and the exchange rate of the lira maintained its stability against the dollar in the parallel market, according to the weekly report ofBank Audi.
In detail, foreign institutional traders recorded net selling in the bond market Eurobonds During this week, amid cautious anticipation of signs of calm between… US andIran Driven by intense diplomatic efforts to settle the conflict, while the Israeli escalation continues in various regions of Lebanon. In this context, contractions were recorded in the prices of government debt securities along the yield curve from 25.63-28.00 cents to the dollar at the end of the previous week to 25.00-27.25 cents to the dollar on Friday.
Regarding the stock market, the Beirut Stock Exchange recorded a price increase of 1.3%, while trading volumes amounted to approximately $2 million during this week, compared to $5 million the previous week. In terms of the currency trading market, the exchange rate of the lira against the dollar remained moving marginally in the vicinity of 89600-89700 this week. The latest statistics show that the Bank of Lebanon’s total reserves in currencies and gold have declined significantly by $6.5 billion since the outbreak of the Iranian war at the end of February 2026, reaching approximately $53.2 billion at the end of May 2026, mainly as a result of the decline in global gold prices.
Markets
In the money market: The interbank interest rate fell from 20% at the end of the previous week to 10% on Friday, indicating the relative availability of liquidity in Lebanese pounds within the money market. The latest monetary statistics issued by the Bank of Lebanon for the week ending May 28, 2026 showed that resident bank deposits expanded by 2,461 billion pounds. This is due to an increase in bank deposits denominated in liras by a value of 3,575 billion liras, amid a growth in demand deposits in liras by a value of 4,016 billion liras, and a decline in savings deposits in liras by a value of 441 billion liras, while bank deposits denominated in foreign currencies decreased by a value of 1,114 billion liras (equivalent to $12.4 million according to the official exchange rate of 89,500 liras). In this context, the monetary supply in its broad sense (M4) expanded by 3,532 billion liras per week, amid an increase in the volume of cash in circulation by 1,085 billion liras and a slight decline in the portfolio of treasury bonds subscribed by the non-banking sector, with a value of 14 billion liras.
In the currency market: This week, the exchange rate of the lira against the dollar continued to record marginal movements in the parallel market in the range of 89,600-89,700, while the Bank of Lebanon’s reserves of gold and currencies amounted to approximately 53,170 million dollars at the end of May 2026, compared to 59,628 million dollars at the end of February 2026, the date of the outbreak of the Iranian war, which indicates a remarkable contraction of 6,458 million dollars during the three months. The past. This contraction is mainly due to a decrease in reserves gold The Central Bank has increased from its highest levels of $47,750 million at the end of February to $41,723 million at the end of May of the current year, i.e. $6,027 million.
The decline in the central bank’s gold reserves is due to the decline in global gold prices, driven by the strengthening of the value of the dollar and the absolute expectation that the US Federal Reserve will raise the rate. Interest In December of this year due to inflationary fears, as the closure of the Strait of Hormuz as a result of the US-Iranian conflict led to a remarkable jump in global oil prices by 30% from the end of February until the end of May. As for the Bank of Lebanon’s liquid reserves in currencies, they amounted to approximately 11,447 million dollars at the end of May, compared to 11,878 million dollars at the end of February, that is, a decrease of 431 million dollars during the past three months. This comes in light of the deficit in public finances due to the increase in public expenditures due to the costs associated with the consequences of the war, not to mention the decline in public revenues due to the slowdown in economic activity and the decline in tax collection.
In the stock market: This week, the Beirut Stock Exchange recorded a price increase of 1.3%. Out of 3 stocks traded this week, the prices of two stocks rose while the prices of one stock declined. In detail, Solidere B share prices increased by 4.4% to $73.10, while Solidere A share prices fell by 0.4% to $70.40. In terms of banking stocks, the prices of “BLOM Bank” deposit receipts jumped by 14.3% to $6.40. In terms of trading volumes, the nominal trading value amounted to approximately $1.8 million during this week, compared to $1.8 million in the previous week, noting that Solidere shares accounted for the lion’s share of activity (about 98%).
In the Eurobonds market: The Lebanese Eurobonds market took a declining path this week amid anticipation of signs of cautious calm in the region led by tireless diplomatic efforts to contain the US-Iranian conflict, while Israeli attacks continue in various Lebanese regions, and amid anticipation of a review by the Financial Action Task Force (FATF) to assess Lebanon’s financial situation.
In details, Lebanese sovereign debt securities recorded a decline in prices along the yield curve amid net selling by foreign institutional dealers, as they fell from 25.63-28.00 cents to the dollar at the end of last week to 25.00-27.25 cents on Friday. This compares to price levels of 23.10 cents at the end of December 2025, and the lowest level recorded since the beginning of the year at 21.50 cents on April 2, 2026.
