According to BDL’s latest monetary report, the BOP recorded a cumulative deficit of $1,812.1M by June 2021, compared to a deficit of $2,486.3M over the same period last year. Accordingly, Net foreign Assets (NFAs) of BDL fell by $3,458.5M, while the NFAs of commercial banks added $1,646.4M for 2021.
On a monthly basis, the BOP deficit stood at $238.3M, as NFAs of BDL fell by $544.6 and Commercial banks rose by $306.3.
For a meaningful analysis, we examine the NFAs of commercial banks. For the month of June, the decline in foreign liabilities can be largely attributed to the monthly reduction in the “Non-resident customer deposits”, which dropped to $26.41B. Foreign assets mainly decreased following the decline in “Claims on non-resident customers” to $3.64B and the decline in claims on non-resident financial sector to $4.65B. As to the decline of NFAs of BDL, it is mainly attributed to the continued subsidization of essential goods, something that BDL has indicated would stop soon as it is being funded from required reserves.
On a related note, BDL issued Circular 158 which provides binding instructions to banks to pay back gradually their customers’ foreign currency deposits. The circular applies to all accounts opened before 31/10/2019 and calculated based on the accounts as of 31/3/2021, on the condition that the accounts do not exceed those available at 31/10/2019. The accounts are also calculated after netting out all claims that the banks have against their customers. This circular will likely decrease the foreign assets of the commercial banks.
Balance of Payments (BoP) by June (in $M)
Source: BDL, BLOMINVEST