M3 Fell by $189M to Stand at $133B by January 16, 2020

BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 285B ($189M) in the week ending January 16, 2020 to settle at LBP 200,411B ($133B), thereby registering an annual decrease of 5.32% and a year-to-date (YTD) down tick of 1.03%.

In details, money supply M1, which includes currency in circulation and demand deposits in LBP, added LBP 633B ($420M) over the same week, reaching LBP 17,642B ($11.70B). The uptick in M1 is attributed to the increase in Currency in circulation and in Demand deposits by LBP 189B ($125M) and LBP 444B ($295M), respectively.

In their turn, Total deposits (excluding demand deposits) fell by LBP 918B ($609M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 846B ($561M) and $48M, respectively.

As such, the rate of broad money dollarization incrementally rose from 68.87% in the week ending January 09 2020, to 68.93% in the week ending January 16, 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

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