BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 708B ($469M) in the week ending February 13, 2020 to settle at LBP 197,904B ($131.28B), thereby registering an annual decrease of 6.04% and a year-to-date (YTD) down tick of 2.26%.
In details, money supply M1, which includes currency in circulation and demand deposits in LBP, expanded by LBP 218B ($145M) over the same week, reaching LBP 18,382B ($12.19B). The increase in M1 is attributed to the rise in currency in circulation and in demand deposits by LBP 203 B ($134.66B) and LBP 15B ($9.95M).
In their turn, Total deposits (excluding demand deposits) fell by LBP 925.66B ($614M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 563B ($373.46M) and $240M, respectively.
As such, the rate of broad money dollarization incrementally rose from 69.42% in the week ending February 06, 2020, to 69.49% in the week ending February 13, 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