The Lebanese pound is expected to remain pegged to the dollar within a trading band of L£1,501-1,514:US$1. The dollar, and thus the pound, is likely to strengthen against the euro over the forecast period owing to investor concerns about sovereign debt problems in the euro zone and to expectations of interest-rate rises. The BdL is strongly committed to defending the peg, aided by its ability to influence interest rates, high levels of assets and strong support from local commercial banks-which, as the holders of the largest part of Lebanon's foreign debt, have much to lose if the peg were to collapse. Nevertheless, in the longer term substantial imbalances in the public finances and external accounts could leave the peg vulnerable.