| ($B) | 02-Feb-22 | 26-Jan-23 | 02-Feb-23 |
| M 1 | 36.37 | 62.56 | 6.29 |
| M 2 | 50.00 | 74.34 | 7.48 |
| M 3 | 130.55 | 148.59 | 80.78 |
| M 4 | 139.77 | 161.33 | 82.08 |
BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by $67.81B to stand at $ 80.78B (LBP 1,211,775B) by the week ending February 2, 2023. Furthermore, on an annual basis, M3 dropped by 38.12% year-over-year and by 46.43% since year-start (YTD). Noting that effective February 1st 2023, the official exchange rate has been set at LBP 15,000 per dollar
In details, M1 fell by LBP 16B by a week to settle at LBP 94,294B by February 2, due to a decrease in demand deposits of LBP 547 B and an increase in currency in circulation of LBP 531 B. Moreover, term and saving deposits increased by LBP 187 B while drop in Deposits denominated in foreign currencies dropped by $ 948 M.
As such, the rate of broad money dollarization rose from 49.97% in the week ending January 26, 2023 to 90.74% in the week ending February 2, 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 February 2, 2023, the Ministry of Finance (MoF) raised LBP 264,501M ($17.63M) through the issuance of notes maturing three months (3M) and one year (1Y). A higher demand was recorded on the 3M notes which grasped 76% of total subscriptions, while the 1 year notes accounted for the remaining shares of 24%. In addition, the yield on 3M and 1Y stood respectively at 3.5% and 4.5%.
Source: BDL; MoF