BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 859B ($570M) in the week ending February 20, 2020 to settle at LBP 197,044B ($130.71B), thereby registering an annual decrease of 6.49% and a year-to-date (YTD) down tick of 2.69%.
In details, money supply M1, which includes currency in circulation and demand deposits in LBP, expanded by LBP 207B ($137M) over the same week, reaching LBP 18,589B ($12.33B). The increase in M1 is attributed to the rise in currency in circulation and in demand deposits by LBP 167B ($110.78B) and LBP 40B ($26.53M).
In their turn, Total deposits (excluding demand deposits) fell by LBP 1,065B ($706.46M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 818B ($542.62M) and $164M, respectively.
As such, the rate of broad money dollarization incrementally rose from 69.49% in the week ending February 13, 2020, to 69.67% in the week ending February 20, 2020.
In its treasury bills (T-Bills) auction dating February 27, 2020, the Ministry of Finance raised LBP 176B ($116.75M) through the issuance of T-bills maturing in 6month (6M) and notes maturing in 3 Years (3Y). and 7Y. The highest demand was realized on notes maturing in 7Y, as they composed 61.74% of the total subscriptions, while the 3Y notes and 6M bills accounted for the remaining shares of 34.11% and 3.95%, respectively. In details, the yields on the 6M bills stood at 5.85%, while the coupon rate on the 3Y notes and 7Y notes stood at 7.50% and 9%, respectively.
Source: Banque du Liban, Lebanese Ministry of Finance