BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 6,457B ($4,283M) to stand at LBP 211,052B ($140B) by the week ending October 06, 2022. However, on an annual basis, M3 added 5.41% year-over-year and 5.44% since year-start (YTD).
In details, M1 grew by LBP 6,252B ($4,147M) by a week to settle at LBP 80,065B ($53.11B) by October 06, 2022; due to an increase in currency in circulation of LBP 6,223 billion and in demand deposits of LBP 29 billion.
In turn, total deposits (excluding Demand deposits) declined by $135.56M, owing to an increase in Terms and saving deposits by $267.33M and a drop in deposits denominated in foreign currencies by $132M.
As such, the rate of broad money dollarization decreased from 55.267% in the week ending September 29, 2022 to 53.482% in the week ending October 06, 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 October 06, 2022, the Ministry of Finance (MoF) raised LBP 32.749B ($21.72M) through the issuance of T-Bills maturing in 6 months (6M) with the yield stood at 4%.
Source: BDL; MoF