Balance of Payments Deficit Widened by October 2018

According to the Central Bank of Lebanon, the balance of payments recorded a deficit of $3.12B by October compared to a deficit of $1B by the same period last year. In fact, the NFAs of the Central Bank increased by $1.19B and the NFAs of commercial banks slid by $4.32B over the same period.

Moreover, the BoP recorded a monthly deficit of $1.81B in October 2018 alone, compared to a deficit of $887.8M in October 2017.  In fact, the NFAs of BDL and commercial banks’ dropped by $373.9M and $1.43B respectively, in October 2018.

However, when we adopt the IMF’s way of computing the Balance of Payments (BOP) by not including the Eurobonds held by BDL into its foreign assets, the BOP deficit becomes $5.62B by October 2018.

Relying on the IMF’s computation method, Lebanon’s Balance of Payments (BoP) would witness a deficit of $5.62B by October 2018 compared to $1.07B deficit recorded during the same period in 2017. The Net Foreign Assets (NFA) of BDL and those of commercial banks would have slipped by $1.30B[1] and $4.31B respectively, by October 2018.

Balance of Payments (BoP) Deficit by October (in Millions $)

bop

 

Source: BDL

[1] This is according to the International Monetary Fund way of computing the BOP by not including Eurobonds held by BDL into its foreign assets. We estimated these Eurobonds to be around $2.5B.

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