BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 7,238B ($4,801M) to stand at LBP 204,596B ($135.72B) by the week ending September 29, 2022. However, on an annual basis, M3 added 2.11% year-over-year and 2.21% since year-start (YTD).
In details, M1 grew by LBP 7,535B ($4,998M) by a week to settle at LBP 73,813B ($48.96B) by September 29, 2022; due to an increase in currency in circulation of LBP 7,153 billion and in demand deposits of LBP 382 billion.
In turn, total deposits (excluding Demand deposits) declined by $196.68M, owing to an increase in Terms and saving deposits by $30.51M and a drop in deposits denominated in foreign currencies by $227M.
As such, the rate of broad money dollarization decreased from 57.467% in the week ending September 22, 2022 to 55.267% in the week ending September 29, 2022.
Looking at interest rates, the average rate on deposits in LBP at commercial banks decreased from 1.34% in October 2021 to 0.7% in October 2022. Similarly, the average rate on deposits in USD at commercial banks decreased from 0.23% in October 2021 to 0.1% in October 2022. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.46% and 6.86% in October 2021 to 5% and 5.11%, respectively, in October 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 October 2022, M3 stood at $148.13B, 11.86% higher than October 2021; NFA were $10.90B, less by 29.11% YOY; CPS was $21.70B, less by 22.15% YOY; NCPS was $24.75B, less by 29.62% annually; and OIN were $90.77B, higher by an annual 68.17%, 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 September 29, 2022, the Ministry of Finance (MoF) raised LBP 107.462B ($71.28M) through the issuance of T-Bills maturing in 3 months (3M) and 1 year (1Y). A higher demand was recorded on the 3M notes which grasped 97.32% of total subscriptions, while the 1Y notes accounted for the remaining shares of 2.68%. In more details, the yield on 3 months stood at 3.50%, while the yield on the 1 year (1Y) reached 4.50%.
Source: BDL; MoF