According to the balance sheet of Banque du Liban (BDL), the central bank’s total assets added 8.01% compared to last year, to reach $170.23B by end of May 2022. The increase was mainly due to the 34.25% year-on-year (YOY) rise in other assets, grasping 40.69% of BDL’s total assets and reaching $69.27B by end of May 2022. In the same context, the gold account, representing 10.04% of BDL’s total assets, recorded a decline of 2.80% YOY to reach $17.08B by the end of May 2022. Interesting to note, during the last two weeks, gold account registered an increase of 1.66% as the global gold market witnessed an uptick due to global uncertainty and economic pressures.
BDL’s foreign assets which grasp 9.41% of total assets recorded a decrease of 24.09% YOY to stand at $16.01B by end of May 2022. In more details, BDL’s foreign assets dropped by 10.15% since year start with $43.11M drop in the last two weeks by end of May 2022. Meanwhile, total volume of dollars injected into the market through Sayrafa platform amounted to $5.17B YTD and $683M for the last 2 weeks. Hence, the Central Bank is surely 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 by the Central Bank will certainly lead to the diminishing of the foreign reserves so afterwards further pressures on the Lebanese pound.
On the liabilities front, financial sector deposits, 64.92% of BDL’s total liabilities, increased by 2.93% and reached $110.50B by end of May 2022 compared to last year, of which more than two thirds are denominated in dollars.
Currency in Circulation outside of BDL, consisted of 16.97% of BDL’s total liabilities, soared by 9.17% YOY and 6.74% ($1.82B) for the last 2 weeks as it reached $28.88B by end of May 2022.
BDL Total, Foreign assets and Currency in Circulation by end of May 2022 ($B)
Source: BDL, BLOMINVEST