| ($B) | 28-Jul-21 | 21-Jul-22 | 28-Jul-22 | Change over the Period (in $M) | Y-O-Y % Change | % Change y-t-d |
| M 1 | 34.25 | 38.65 | 39.47 | 826 | 15.26% | 3.51% |
| M 2 | 49.60 | 50.83 | 51.60 | 771 | 4.03% | -1.19% |
| M 3 | 133.49 | 127.35 | 128.31 | 959 | -3.88% | -3.37% |
| M 4 | 141.68 | 137.34 | 138.27 | 931 | -2.41% | -2.72% |
BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 1,446B ($959M) to stand at LBP 193,425B ($128.31B) by the week ending July 28, 2022. However, on an annual basis, M3 retreated by 3.88% year-over-year and by 3.37% since year-start (YTD).
In details, M1 rose by LBP 1,245B ($826M) by a week to settle at LBP 59,507B ($39.47B) by July 28, 2022; due to an increase in demand deposits of LBP 1416 billion and a decrease in currency in circulation of LBP 171 billion.
In turn, total deposits (excluding Demand deposits) increased by $133.3M, owing to a decrease in Terms and saving deposits by LBP 84B ($55.72M), and a rise in deposits denominated in foreign currencies by $189M.
As such, the rate of broad money dollarization decreased from 60.083% in the week ending July 21, 2022, to 59.781% by the week ending July 28, 2022.
Looking at interest rates, the average rate on deposits in LBP and in USD, at commercial banks, decreased from 1.74% and 0.33% in July 2021 to 0.54% and 0.12%, respectively, in July 2022. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.26% and 5.99% in July 2021 to 5.09% and 4.74%, respectively, in July 2022.
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 July 2022, M3 stood at $129.74B, 2.75% less than July 2021; NFA were $12.09B, less by 22.94% YOY; CPS was $22.98B, less by 22.92% YOY; NCPS was $29.66B, less by 15.95% annually; and OIN were $64.98B, higher by an annual 23.56%, 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 July 28, 2022, the Ministry of Finance (MoF) raised LBP 61.772B ($40.98M) through the issuance of T-Bills maturing in six months (6M), while, the yield on six months stood at 4%.
Source: BDL; MoF