According to the balance sheet of Banque du Liban (BDL), the central bank’s total assets added 4.23% compared to last year, to reach $158.18B by mid of July 2021. The increase was mainly due to the 40.72% year-on-year (YOY) rise in other assets, grasping 34.35% of BDL’s total assets and reaching $54.33B by mid of July 2021. However, the gold account, composing 10.68% of BDL’s total assets slightly increased by 1.24% yearly to reach $16.89B by the same period.
BDL’s foreign assets (grasping 12.82% of total assets) decreased by 34.18% YOY to stand at $20.27B by mid of July 2021. In details, this account mainly includes Eurobonds held by BDL, and reserves that BDL possesses with foreign correspondents and other short-term instruments. In fact, this account doesn’t totally reflect the real situation. For instance, Eurobonds are estimated to be $5.03B; however those Eurobonds are currently trading on average at 15 percent per dollar, which raises questions about the value of Eurobonds on BDL’s balance sheet. That is why a better estimate of liquid and ready foreign reserves excludes them. What means that foreign reserves amount for $15B only.
On the liabilities front, financial sector deposits (67.48% of BDL’s total liabilities) recorded a downtick of 3.04% YOY to settle at $106.74B by mid of July 2021, of which more than two thirds are denominated in dollars.
Looking at Currency in Circulation outside of BDL (17.11% of BDL’s total liabilities) it increased by 102.44% jumping from $13.37B by mid of July 2020 to $27.07B at mid of July 2021.
Lebanon’s green currency reserves have dropped alarmingly by half since the start of the financial crisis. Hence, the ongoing system of importing subsidized mostly medical goods and fuel cannot be sustained by the Central Bank anymore, which has led the Lebanese to further concerns for lifting subsidies as conditions deteriorate.
BDL Total, Foreign assets and currency in circulation as mid of July ($B)
Source: BDL, BLOMINVEST