BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 1,138B ($755M) in the week ending January 9, 2020 to settle at LBP 200,696B ($133B), thereby registering an annual decrease of 5.44% and a year-to-date (YTD) down tick of 0.88%.
In details, money supply M1, which includes currency in circulation and demand deposits in LBP, added LBP 234B ($155M) over the same week, reaching LBP 17,009B ($11.28B). The uptick in M1 is attributed to the increase of LBP 297B ($197M) in Currency in circulation, which outweighed the LBP 63B ($42M) decrease in Demand deposits.
In their turn, Total deposits (excluding demand deposits) fell by LBP1, 371B ($909M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 972B ($645M) and $265M, respectively.
As such, the rate of broad money dollarization incrementally rose from 68.68% in the week ending January 2 2020, to 68.87% in the week ending January 9, 2020.
In its treasury bills (T-Bills) auction dating January 2 2020, the Ministry of Finance raised LBP 120.92B ($80.21M) through the issuance of notes maturing in 3 Years (3Y) and 7Y. The highest demand was realized on notes maturing in 3Y, as they composed 52.36% of the total subscriptions, while the 7Y notes accounted for the remaining shares of 47.64%. In details, the coupon rates on the 3Y and 7Y notes stood at 7.5% and 9%, respectively.
Source: Banque du Liban, Lebanese Ministry of Finance