According to the balance sheet of Banque du Liban (BDL), the central bank’s total assets added 7.94% compared to last year, to reach $162.99B by end of February 2022. The increase was mainly due to the 36.36% year-on-year (YOY) rise in other assets, grasping 37.49% of BDL’s total assets and reaching $61.10B by end of February 2022. Meanwhile, the gold account, composing 10.77% of BDL’s total assets, increased by 7.95% yearly to reach $17.54 B by the same period as the international gold price is increasing globally amid War in Ukraine and universal uncertainty.
BDL’s foreign assets (grasping 10.39% of total assets) decreased by 26.02% YOY to stand at $16.93B by end of February 2022. In more details, BDL’s foreign assets dropped by 5.01% since year start with $292.68M drop in only 2 weeks by end of February 2022. Meanwhile, total volume of dollars injected into the system through Sayrafa platform amounted to $577M for the same period. Hence, the Central Bank is most likely taking measures to absorb dollars from the market while Lebanese liquidity is shrinking. Nevertheless, this strategy could not ensure a long-lasting stability for the Lebanese pound as injecting dollars through sayrafa without sound monetary and fiscal reforms means ongoing interventions of the Central Bank that lead to the diminishing of the foreign reserves.
On the liabilities front, financial sector deposits (67% of BDL’s total liabilities) slightly increase by 0.89% and reached $109.21B by end of February 2022 compared to last year, of which more than three are denominated in dollars
Looking at Currency in Circulation outside of BDL (16.42% of BDL’s total liabilities) it increased annually by 17.02% and reached $26.77B by end of February 2022. Interesting to note that since Circular 161 was introduced in December 16, 2021, the money in circulation has dropped significantly by 11.42% from $30.22B which reflects the substantial measures of the Central Bank to grip liquidity from the market instead of continuing printing more money.
BDL Total, Foreign assets and Currency in Circulation end of February ($B)
Source: BDL, BLOMINVEST