According to the balance sheet of Banque du Liban (BDL), the central bank’s Total assets added 9% since year-start, to reach $154.13B in July 2020. The increase was mainly due to the 29.17% rise in gold prices since the start of the year to $1,959.5/ounce by July 2020. As a result the “Gold” account (composing 11.70% of BDL’s total assets) increased by 29.43% to $18B.
BDL’s foreign assets (grasping 19.91% of total assets) decreased by 17.68% ($6.58B) year to date (YTD) to stand at $30.68B in 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 including a basket of 300 essential food items. 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 (25.19%of total assets) climbed to $38.83B, up by 2.21% year-to-date (YTD) in July 2020.
On the liabilities front, Financial sector deposits (71.62% of BDL’s total liabilities) recorded a downtick of 1.44% YTD to settle at $110.39B in July 2020. Notably, Currency in Circulation outside of BDL (8.96% of BDL’s total liabilities) rose from $7B end-December 2019 to $13.81B in 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 July (in $B)
Source: BDL, Blominvest Bank