| ($B) | 19-Jan-22 | 12-Jan-23 | 19-Jan-23 | Change over the Period (in $M) | Y-O-Y % Change | % Change y-t-d |
| M 1 | 37.21 | 59.68 | 61.40 | 1,719 | 65.02% | -4.65% |
| M 2 | 50.99 | 71.74 | 73.38 | 1,642 | 43.91% | -4.17% |
| M 3 | 131.72 | 145.89 | 147.53 | 1,636 | 12.00% | -2.18% |
| M 4 | 140.97 | 158.38 | 160.07 | 1,693 | 13.55% | -1.72% |
BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 2,466B ($ 1,636M) to stand at LBP 222,397B ($ 147.53B) by the week ending January 19, 2023. Furthermore, on an annual basis, M3 added 12% year-over-year but retreated by 2.18% since year-start (YTD).
In details, M1 increased by LBP 2,592B ($ 1,719M) by a week to settle at LBP 92,566B ($61.4B) by January 19, 2022; due to an increase in currency in circulation of LBP 3,619 billion and a decrease in demand deposits of LBP 1,027 billion.
In turn, total deposits (excluding Demand deposits) fell by LBP 126B ($ 84M), owing to a drop in Terms and saving deposits by LBP 117B ($78M) and in deposits denominated in foreign currencies by USD 6M.
As such, the rate of broad money dollarization fell from 50.83% in the week ending January 12, 2023 to 50.26% in the week ending January 19, 2023.
Looking at interest rates, the average rate on deposits in LBP at commercial banks decreased from 1.03% in January 2022 to 0.73% in January 2023. Similarly, the average rate on deposits in USD at commercial banks decreased from 0.18% in January 2022 to 0.09% in January 2023. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 6.4% and 6.15% in January 2022 to 5.61% and 5.38%, respectively, in January 2023.
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 January 2023, M3 stood at $149.59B, 14.47% higher than January 2022; NFA were $12.54B, less by 15.24% YOY; CPS was $19.56B, less by 25.6% YOY; NCPS was $18.11B, less by 44.45% annually; and OIN were $99.38B, higher by an annual 74.37%, 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 January 19, 2023, the Ministry of Finance (MoF) raised LBP 150,702M ($99.97M) through the issuance of notes maturing three months (3M) and one year (1Y). A higher demand was recorded on the 1Y notes which grasped 55% of total subscriptions, while the 3 months notes accounted for the remaining shares of 45%. In addition, the yield on 3M and 1Y stood respectively at 3.5% and 4.5%.
Source: BDL; MoF