According to the balance sheet of Banque du Liban (BDL), the central bank’s Total assets added 7.36% since year-start, to reach $151.76B in mid-July 2020. The increase was mainly due to the 19.40% rise in gold prices since the start of the year to $1,811.3/ounce by mid-July 2020. As a result the “Gold” account (composing 11% of BDL’s total assets) increased by 19.75% to $16.69B.
BDL’s foreign assets (grasping 20.30% of total assets) decreased by 17.35% ($6.47B) to stand at $30.80B in mid-July 2020. In details, 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. Worth mentioning that during the first 2 weeks of July alone, the foreign assets dropped by $2.15B since June 2020. In turn, BDL’s Securities portfolio (25.54%of total assets) climbed to $38.76B, up by 2.04% year-to-date (YTD) in Mid-July 2020.
On the liabilities front, Financial sector deposits (72.54% of BDL’s total liabilities) recorded a downtick of 1.72% YTD to settle at $110B in mid-July 2020. It should be noted that during the first 2 weeks of July alone, the foreign assets slumped by $2.12B since June 2020
Notably, Currency in Circulation outside of BDL (8.81% of BDL’s total liabilities) rose from $7B end-December 2019 to $13.37B in mid-July 2020. 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 economy. 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 Total and Foreign Assets in Mid-July (in $B)
Source: BDL, Blominvest Bank