M3 reached $80.48B Over the Period Ending February 9, 2023

($B)09-Feb-2202-Feb-2309-Feb-23Change over the PeriodY-O-Y % Change% Change


M 136.1462.556.21(56.34)-82.83%-90.36%
M 249.6974.457.40(67.06)-85.11%-90.34%
M 3130.11803.8380.48(723.35)-38.14%-46.63%
M 4139.38816.7181.78(734.93)-41.33%-49.79%

BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by LBP 4,532B to stand at LBP 1,207,243B ($ 80.48B) by the week ending February 9, 2023. Furthermore, on an annual basis, M3 dropped by 38.14% year-over-year and by 46.63% 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 1,207B by a week to settle at LBP 93,088B ($6.21B) by February 9, due to a decrease in demand deposits of LBP 1,308 billion and an increase in currency in circulation of LBP 101 billion.

In turn, total deposits (excluding Demand deposits) fell by LBP 3,325B, owing to a drop in Terms and saving deposits by LBP 40B and in deposits denominated in foreign currencies by USD 219M (LBP 3,285B).

As such, the rate of broad money dollarization rose from 90.74% in the week ending February 2, 2023 to 90.81% in the week ending February 9, 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 9, 2023, the Ministry of Finance (MoF) raised LBP 109,408M ($7.29M) through the issuance of notes maturing six months (6M). In addition, the yield on 6M stood at 4%.

Source: BDL; MoF

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