Lebanese Liquidity Shrinks by $5.87B YTD amid BDL measures to absorb liquidity

According to the balance sheet of Banque du Liban (BDL), the central bank’s total assets added 6.83% compared to last year, to reach $161.92B by mid of March 2022. The increase was mainly due to the 30.63% year-on-year (YOY) rise in other assets, grasping 37.11% of BDL’s total assets and reaching $60.08B by mid of March 2022. However, a very rare fall by $1.01B in other assets was registered in the first half of March representing the second drop in this year, most likely as a result of reduction in seigniorage.

Moreover, the gold account, composing 10.99% of BDL’s total assets, increased by 11.62% yearly to reach $17.79B by the same period as the international gold price is increasing globally amid War in Ukraine and universal uncertainty.

Meanwhile, BDL’s foreign assets, grasping 10.24% of total assets, decreased by 26.42% YOY to stand at $16.58B by mid of March 2022. In more details, BDL’s foreign assets dropped by 6.98% since year start with $350.32M drop in only 2 weeks by mid of March 2022 while total volume of dollars injected into the system through Sayrafa platform amounted to $890M for the same period. Hence, the Central Bank is most likely taking measures to absorb dollars from the market while Lebanese liquidity is shrinking.

On the liabilities front, financial sector deposits, 67.62% of BDL’s total liabilities, slightly increase by 1.66% and reached $109.50B by mid of March 2022 compared to last year, of which more than three are denominated in dollars

Looking at Currency in Circulation outside of BDL, gripping 15.12% of BDL’s total liabilities, it increased annually by 2.56% and reached $24.47B by mid of March 2022. Nevertheless, as the Circular 161 was introduced in last December, the money in circulation has been dropping considerably to record a fall by 19.35% YTD till mid-March.  The continuous downtrend in money in circulation reflects the substantial measures of the Central Bank to limit liquidity from the market instead of continuing printing more money.

BDL Total, Foreign assets and Currency in Circulation mid of March ($B)

Lebanese Liquidity Shrinks by $5.87B YTD amid BDL measures to absorb liquidity


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