BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 2,011B ($1,334M) to stand at LBP 223,274B ($148.11B) by the week ending October 27, 2022. However, on an annual basis, M3 added 11.80% year-over-year and 11.54% since year-start (YTD).
In details, M1 grew by LBP 2,051B ($1,360M) by a week to settle at LBP 91,483B ($60.69B) by October 27, 2022; due to an increase in currency in circulation of LBP 1,529 billion and in demand deposits of LBP 522 billion.
In turn, total deposits (excluding Demand deposits) progressed by $26.11M, owing to an increase in Terms and saving deposits by $25.20M while deposits denominated in foreign currencies declined by $51M.
As such, the rate of broad money dollarization decreased from 51.330% in the week ending October 20, 2022 to 50.83% in the week ending October 27, 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 27, 2022, the Ministry of Finance (MoF) raised LBP 33.224B ($22.03M) 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 59.67% of total subscriptions, while the 1Y notes accounted for the remaining shares of 40.33%. 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