BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by LBP 3,170B ($2,103M) to stand at LBP 220,104B ($146.01B) by the week ending November 03, 2022. However, on an annual basis, M3 added 10.33% year-over-year and 9.96% since year-start (YTD).
In details, M1 retreated by LBP 2,576B ($1,709M) by a week to settle at LBP 88,907B ($58.98B) by November 03, 2022; due to a decrease in currency in circulation of LBP 2,173 billion and in demand deposits of LBP 403 billion.
In turn, total deposits (excluding Demand deposits) decreased by $394.02M, owing to a contraction in Terms and saving deposits by $169.15M while deposits denominated in foreign currencies declined by $225M.
As such, the rate of broad money dollarization increased from 50.83% in the week ending October 27, 2022 to 51.411% in the week ending November 03, 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 November 03, 2022, the Ministry of Finance (MoF) raised LBP 6.079B ($4.03M) through the issuance of T-Bills maturing in 6 months (6M). In addition, the yield on 6 M T-Bills stood at 4%.
Source: BDL; MoF