BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 4,626B ($3,069M) to stand at LBP 221,263B ($146.77B) by the week ending October 20, 2022. However, on an annual basis, M3 added 10.70% year-over-year and 10.54% since year-start (YTD).
In details, M1 grew by LBP 4,619B ($3,064M) by a week to settle at LBP 89,432B ($59.32B) by October 20, 2022; due to an increase in currency in circulation of LBP 4,882 billion and a decrease in demand deposits of LBP 263 billion.
In turn, total deposits (excluding Demand deposits) progressed by $4.84M, owing to an increase in Terms and saving deposits by $48.42M and a decline in deposits denominated in foreign currencies by $44M.
As such, the rate of broad money dollarization decreased from 52.456% in the week ending October 13, 2022 to 51.330% in the week ending October 20, 2022.
Looking at interest rates, the average rate on deposits in LBP at commercial banks decreased from 1.23% in November 2021 to 0.65% in November 2022. Similarly, the average rate on deposits in USD at commercial banks decreased from 0.2% in November 2021 to 0.07% in November 2022. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.2% and 6.75% in November 2021 to 5.3% and 4.35%, respectively, in November 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 November 2022, M3 stood at $147.08B, 11.74% higher than Novemver 2021; NFA were $11.63B, less by 25.32% YOY; CPS was $21.09B, less by 22.69% YOY; NCPS was $22.34B, less by 35.05% annually; and OIN were $92B, higher by an annual 69.31%, 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 20, 2022, the Ministry of Finance (MoF) raised LBP 26.474B ($17.56M) through the issuance of T-Bills maturing in 6 months (6M) with the yield stood at 4%.
Source: BDL; MoF