|($B)||15-Dec-21||08-Dec-22||15-Dec-22||Change over the Period (in $M)||Y-O-Y % Change||% Change |
BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 1,164B ($ 772M) to stand at LBP 221,400B ($ 146.87B) by the week ending December 15, 2022. Furthermore, on an annual basis, M3 added 10.87% year-over-year and 10.61% since year-start (YTD).
In details, M1 increased by LBP 1,433B ($ 950.68M) by a week to settle at LBP 90,743B ($ 60.19B) by December 15, 2022; due to an increase in currency in circulation of LBP 797 billion and in demand deposits of LBP 636 billion.
In turn, total deposits (excluding Demand deposits) fell by LBP 269B ($ 178M), owing to a drop in Terms and saving deposits by LBP 89B ($59M) and a drop in deposits denominated in foreign currencies by LBP 180B ($119M).
As such, the rate of broad money dollarization decreased from 51.12% in the week ending December 8, 2022 to 50.77% in the week ending December 15, 2022.
Looking at interest rates, the average rate on deposits in LBP at commercial banks decreased from 1.09% in December 2021 to 0.6% in December 2022. Similarly, the average rate on deposits in USD at commercial banks decreased from 0.19% in December 2021 to 0.06% in December 2022. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 7.14% and 6.01% in December 2021 to 4.56% and 4.16%, respectively, in December 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 December 2022, M3 stood at $152.29B, 14.18% higher than December 2021; NFA were $12.07B, less by 20.71% YOY; CPS was $19.93B, less by 26.14% YOY; NCPS was $21.04B, less by 36.11% annually; and OIN were $99.25B, higher by an annual 70.38%, 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 December 15, 2022, the Ministry of Finance (MoF) raised LBP 46,376M ($30.76M) through the issuance of notes maturing in 6 months and T-bills maturing in two years. A higher demand was recorded on the 6M notes which grasped 68% of total subscriptions, while the one year T-bills accounted for the remaining shares of 32%. In more details, the yield on 6 months stood at 4% and the return on two years (2Y) reached 5.06%.
Source: BDL; MoF