BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 1,205B ($799M) in the week ending January 23, 2020 to settle at LBP 199,206B ($132.14B), thereby registering an annual decrease of 5.63% and a year-to-date (YTD) down tick of 1.62%.
In details, money supply M1, which includes currency in circulation and demand deposits in LBP, retreated by LBP 297B ($196M) over the same week, reaching LBP 17,345B ($11.51B). The downtick in M1 is attributed to the drop in demand deposits by LBP 406B ($269M) while currency in circulation rose by LBP 109B ($72.30M)
In their turn, Total deposits (excluding demand deposits) fell by LBP 907B ($601M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 564B ($374M) and $227M, respectively.
As such, the rate of broad money dollarization incrementally rose from 68.93% in the week ending January 16 2020, to 69.18% in the week ending January 23, 2020.
In its treasury bills (T-Bills) auction dating January 23, 2020, the Ministry of Finance raised LBP 228.73B ($151.73M) through the issuance of T-bills maturing in 3month (3M) and 1 year (1Y) and notes maturing in 5 Years (5Y). The highest demand was realized on bills maturing in 1Y, as they composed 53.34% of the total subscriptions, while the 5Y notes and 3M bills accounted for the remaining shares of 35.86% and 10.80%, respectively. In details, the yields on the 3M and 1Y bills stood at 5.30% and 6.50%, while the coupon rate on the 5Y notes stood at 8%.
Source: Banque du Liban, Lebanese Ministry of Finance