BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 143B ($95M) in the week ending December 26th 2019 to stand at LBP 202,486B ($134B), thereby registering an annual decrease of 4.83% and a year-to-date (YTD) decline of 4.55%.
In details, money supply M1, which includes currency in circulation and demand deposits in LBP, added LBP 1,083B ($718M) over the same week, reaching LBP 16,577B ($11B). The uptick in M1 is attributed to the respective rises of LBP 592B ($393M) and LBP 491B ($326M) in each of Currency in circulation and in Demand deposits, respectively.
In their turn, Total deposits (excluding demand deposits) fell by LBP1.2B ($813M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies fell by LBP 911B ($604M) and $209M, respectively.
As such, the rate of broad money dollarization slipped marginally from 68.72% in the week ending December 19th to settle at 68.61% in the week ending December 26th 2019.
In its treasury bills (T-Bills) auction dating December 19th 2019, the Ministry of Finance raised LBP 182.18B ($121M) through the issuance of bills maturing in 6 months (6M) and notes maturing in 2 Years (2Y) and 10Y. The highest demand was realized on the long-term notes maturing in 10Y, as they composed 63.8% of the total subscriptions, while the 6M bills and 2Y notes accounted for the remaining shares of 3.2% and 33% of the total, respectively. In fact, the discount rate on the 6M bills stood at 5.85% while the coupon rates on the 2Y and 10Y notes stood at 7% and 10%, respectively.
Source: Banque du Liban, Lebanese Ministry of Finance