M3 reached $133.06B Over the Period Ending January 13, 2022

BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 127B ($84M) to stand at LBP 200,587B ($133.06B) by the week ending January 13, 2022. As such, on an annual basis, M3 added 0.06% year over year and by 0.67% since year-start (YTD).

In details, M1 increased by LBP 441B ($292M) by a week to settle at LBP 58,489B ($38.80B) by January 13, 2022. The expansion is attributed to the progression in demand deposits by LBP 681B and a decrease in currency in circulation by LBP 240B.

In turn, total deposits (excluding Demand deposits) decreased by $207.81M, owing to a decrease in Terms and saving deposits by LBP 190B ($126.04M). In the same token, deposits denominated in foreign currencies regressed by $82M.

As such, the rate of broad money dollarization decreased from 60.48% in the week ending January 6, 2022 to 60.38% by the week ending January 13, 2022.

Looking at interest rates, the average rate on deposits in LBP and in USD, at commercial banks, decreased from 2.64% and 0.94% in December 2020 to 1.09% and 0.19%, respectively, in December 2021. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.77% and 6.73% in December 2020 to 7.14% and 6.73%, respectively, in December 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 December 2021, M3 stood at $133.38, 0.51% more than December 2020; NFA were $15.20B, less by 15.16% YOY; CPS was $26.97B, less by 21.74% YOY; NCPS was $33.25B, less by 14.89% annually; and OIN were $57.94B, higher by an annual 40.56%, 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 January 13, 2022, the Ministry of Finance (MoF) raised LBP 142.442B ($94.49M) through the issuance of T-Bills maturing in 6 months (6M), and notes maturing in 2 years (2Y). The highest demand was recorded on the 6M T-bills which grasped 89.47% of total subscriptions, while the 2Y notes accounted for the remaining shares of 10.43%. In details, the yield on 6M T-bills stood at 4%. Meanwhile coupon on the 2Y notes stood at 5.06%.

Source: BDL; MoF

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