M3 reached $129.22B Over the Period Ending August 4, 2022

($B)04-Aug-2128-Jul-2204-Aug-22Change over the Period (in $M)Y-O-Y % Change% Change


M 134.3439.4740.951,47919.25%7.39%
M 249.6251.6053.011,4106.84%1.51%
M 3133.39128.31129.22910-3.13%-2.68%
M 4141.62138.27139.841,569-1.26%-1.62%

BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 1,371B ($909M) to stand at LBP 194,796B ($129.22B) by the week ending August 4, 2022. However, on an annual basis, M3 retreated by 3.13% year-over-year and by 2.68% since year-start (YTD).

In details, M1 rose by LBP 2,229B ($1,478M) by a week to settle at LBP 61,736B ($40.95B) by August 4, 2022; due to an increase in currency in circulation of LBP 1723 billion and in demand deposits of LBP 506 billion.

In turn, total deposits (excluding Demand deposits) decreased by $569.19M, owing to a decrease in Terms and saving deposits by LBP 103B ($68.33M) and deposits denominated in foreign currencies.

As such, the rate of broad money dollarization decreased from 59.781% in the week ending July 28, 2022, to 58.973% by the week ending August 4, 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 August 4, 2022, the Ministry of Finance (MoF) raised LBP 1,015,449M ($673.6M) through the issuance of T-Bills maturing in 3 months (3M) and notes maturing in 1 year (1Y). A higher demand was recorded on the 1 year notes, which grasped 97.07% of total subscriptions, while the 3 months T-Bills accounted for the remaining shares of 2.93%. In more details, the yield on 3 months stood at 3.50% whereas the coupon on the 1 year note reached 4.50%.

Source: BDL; MoF

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