M3 reached $129.06B Over the Period Ending August 11, 2022

($B)11-Aug-2104-Aug-2211-Aug-22Change over the Period (in $M)Y-O-Y % Change% Change


M 134.4640.9540.81-14418.42%7.01%
M 249.6853.0152.80-2116.29%1.11%
M 3 133.34129.22129.06-163-3.22%-2.81%
M 4 141.61139.84139.62-223-1.41%-1.77%

BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by LBP 245B ($163M) to stand at LBP 194,551B ($129.06B) by the week ending August 11, 2022. However, on an annual basis, M3 retreated by 3.22% year-over-year and by 2.81% since year-start (YTD).

In details, M1 fell by LBP 217B ($144M) by a week to settle at LBP 61,520B ($40.81B) by August 11, 2022; due to a decrease in currency in circulation of LBP 133 billion and in demand deposits of LBP 84 billion.

In turn, total deposits (excluding Demand deposits) decreased by $19M, owing to a decrease in Terms and saving deposits by $67M (LBP 102B) and a rise in deposits denominated in foreign currencies by $48M.

As such, the rate of broad money dollarization increased from 58.973% by the week ending August 4, 2022 to 59.084% in the week ending August 11, 2022.

Looking at interest rates, the average rate on deposits in LBP at commercial banks decreased from 1.62% in August 2021 to 0.6% in August 2022. Similarly, the average rate on deposits in USD at commercial banks decreased from 0.3% in August 2021 to 0.1% in August 2022. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.52% and 5.87% in August 2021 to 4.85% and 5.51%, respectively, in August 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 August 2022, M3 stood at $127.7B, 4.13% less than August 2021; NFA were $11.5B, less by 23.11% YOY; CPS was $22.54B, less by 23.2% YOY; NCPS was $27.85B, less by 20.73% annually; and OIN were $65.8B, higher by an annual 22.42%, 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 11, 2022, the Ministry of Finance (MoF) raised LBP 3,530M ($2.34M) through the issuance of T-Bills maturing in 6 months (6M). In more details, the yield on 6 months stood at 4%.

Source: BDL; MoF

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