BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by LBP 28B ($19M) to stand at LBP 198,486B ($131.67B) by the week ending December 09, 2021. As such, on an annual basis, M3 decreased by 0.37% year over year and by 0.38% since year-start (YTD).
In details, M1 added LBP 310B ($205M) by a weekly to settle at LBP 54,812B ($36.36B) by December 09, 2021. The expansion is attributed to the decrease in demand deposits by LBP 552B and an increase in currency in circulation by LBP 862B.
In turn, total deposits (excluding Demand deposits) decreased by $223.94M, owing to a decrease in Terms and saving deposits by LBP 116B ($76.94M). In the same token, deposits denominated in foreign currencies regressed by USD 147M.
As such, the rate of broad money dollarization decreased from 61.65% in the week ending December 2, 2021 to 61.55% by the week ending December 9, 2021.
Looking at interest rates, the average rate on deposits in LBP and in USD, at commercial banks, decreased from 2.91% and 0.97% in November 2020 to 1.23% and 0.2%, respectively, in November 2021. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.92% and 6.63% in November 2020 to 7.2% and 6.75%, respectively, in November 2021.
Analytically, the money supply M3 can be derived from combining the balance sheet of BDL with the balance sheet of banks to arrive at the monetary survey of the banking system. The resulting M3 would be equal to the sum of: net foreign assets (NFA), credit to the private sector (CPS), net credit to the public sector (NCPS), and other items net (OIN). Latest data show that in November 2021, M3 stood at $131.62, 0.230% more than November 2020; NFA were $15.58B, less by 9.98% YOY; CPS was $27.28B, less by 23.34% YOY; NCPS was $34.41B, less by 14.56% annually; and OIN were $54.34B, higher by an annual 40.25%, and comprising mostly (in BDL’s terminology) other assets which include open market operations and seigniorage, considered to be a controversial account by some.
In its treasury bills (T-Bills) auction dating December 9, 2021, the Ministry of Finance (MoF) raised LBP 202.69B ($134.45M) through the issuance of T-Bills maturing in 3 months (3M), and notes maturing in 1 year (1Y) and 5 years (5Y). The highest demand was recorded on the yield on 3M T-bills which grasped 38.88% of total subscriptions, while the 5Y notes and 1Y notes accounted for the remaining shares of 30.86% and 30.26%, respectively. In details, the yield on 3M T-bills stood at 3.50%. Meanwhile coupon on the 1Y and 5Y notes stood at 4.31% and 6%, respectively.
Source: BDL; MoF