According to the balance sheet of Banque du Liban (BDL), the central bank’s Total assets added 6.6% since year-start, to reach $150.7B in mid-June 2020. The increase was mainly a result of the 26% annual rise in gold prices to $1,635.9/ounce over the period, which in turn propped-up the “Gold” account (composing 10.5% of BDL’s total assets) by 13.6% to $15.8B.
In fact, BDL’s Foreign assets (grasping 22% of total assets) decreased by $4.2B (i.e. 11.2% year-to-date) to stand at $33.1B in Mid-June 2020. Starting May 27th, BDL began extending to commercial banks foreign currency to support imports of raw materials for industrial exporters including the agro-food industry, and of basic food imports as per the newly issued Circulars No. 556 and 557 in May. As such, BDL’s foreign assets retreated by $413.6M between end-May to mid-June 2020, compared to a softer decrease of $200M between end April and mid-May. In turn, BDL’s Securities portfolio (25.6%of total assets) climbed to $38.6B, up by 1.72% year-to-date (YTD) in mid-June 2020.
On the liabilities front, Financial sector deposits (74% of BDL’s total liabilities) fell by an incremental 0.41% YTD to settle at $111.6B in mid-June 2020. Notably, Currency in Circulation outside of BDL (8.2% of BDL’s total liabilities) rose from $7B end-December 2019 to $12.4B in mid-June. This uptrend in circulated currency has been ongoing since the beginning of the year, as it continues to reflect clients’ strong preference for cash amid the growing uncertainty and feeble trust in the country. In addition, BDL’s circulars No.148 and 151 further supported and facilitated cash withdrawals, as the circulars allowed depositors with foreign currency accounts to withdraw their savings in Lebanese lira at close to the market rate.
BDL Foreign Assets (in $B) in mid-June
Source: BDL