BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 598B ($397M) in the week ending March 5, 2020 to settle at LBP 196,336B ($130.24B), thereby registering an annual decrease of 6.91% and a year-to-date (YTD) down tick of 3.04%.
In details, money supply M1, which includes currency in circulation and demand deposits in LBP, expanded by LBP 504B ($334M) over the same week, reaching LBP 19,651B ($13.04B). The increase in M1 is attributed to the rise in currency in circulation by LBP 644B ($427.19M) while demand deposits declined by LBP 140B ($92.87M).
In their turn, Total deposits (excluding demand deposits) fell by LBP 1,101B ($730.35M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 856B ($567.83M) and $163M, respectively.
As such, the rate of broad money dollarization incrementally rose from 69.76% in the week ending February 27, 2020, to 69.85% in the week ending March 5, 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