M3 reached $80.91B Over the Period Ending February 16, 2023

($B)16-Feb-2209-Feb-2316-Feb-23Change over the PeriodY-O-Y % Change% Change


M 135.9061.756.23(55.52)-82.64%-90.32%
M 249.3773.637.42(66.21)-84.97%-90.31%
M 3129.67800.8280.91(719.92)-37.60%-46.35%
M 4138.99813.7482.19(731.55)-40.87%-49.54%

BDL’s latest statistics on money supply revealed that Broad Money (M3) increased by LBP 6,360B to stand at LBP 1,213,603B ($ 80.91B) by the week ending February 16, 2023. Furthermore, on an annual basis, M3 dropped by 37.6% year-over-year and by 46.35% 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 rose by LBP 423B by a week to settle at LBP 93,510B ($6.23B) by February 16, due to an increase in demand deposits of LBP 247 billion and in currency in circulation of LBP 176 billion.

In turn, total deposits (excluding Demand deposits) rose by LBP 5,933B ($395M), owing to a drop in Terms and saving deposits by LBP 82B and a rise in deposits denominated in foreign currencies by $401M (LBP 6,015B).

As such, the rate of broad money dollarization rose from 90.81% in the week ending February 9, 2023 to 90.83% in the week ending February 16, 2023.

Looking at interest rates, the average rate on deposits in LBP at commercial banks decreased from 0.87% in March 2022 to 0.63% in March 2023. Similarly, the average rate on deposits in USD at commercial banks decreased from 0.16% in March 2022 to 0.07% in March 2023. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 5.58% and 5.72% in March 2022 to 5.61% and 4.04%, respectively, in March 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 March 2023, M3 stood at LBP 1,206,971B ($80.46B) versus LBP 190,707 B ($126.5B) in March 2022; NFA were LBP 222,029.5B ($14.8B) compared to LBP 22,452.4B ($14.9B) in March 2022; CPS was LBP 142,281.3B ($9.49B) compared to LBP 38,134.4B ($25.3B) in March 2022; NCPS was LBP 794,457.4B ($52.96B) compared to LBP 45,031B ($29.87B) in March 2022; and OIN were LBP 48,202.7B ($3.21B) compared to LBP 85,089.2B ($56.44B) in March 2022, 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 16, 2023, the Ministry of Finance (MoF) raised LBP 77,581M ($5.17M) through the issuance of notes maturing three months (3M) and one year (1Y). A higher demand was recorded for 1Y notes, which grasped 56% of total subscriptions, while the 1 year notes accounted for the remaining shares of 44%. In addition, the yield on 3M and 1Y stood respectively at 3.5% and 4.5%.

Source: BDL; MoF

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