BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by LBP 1,659B to stand at LBP 1,151,366B ($ 76.76B) by the week ending December 21, 2023. Furthermore, on an annual basis, M3 dropped by 49.03% year-over-year and by 49.10% 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 dropped by LBP 2,172B by a week to settle at LBP 82,644B ($5.51B) by December 21, due to a decrease in demand deposits of LBP 1,389.78 billion and in currency in circulation of LBP 781.92 billion.
In turn, total deposits (excluding Demand deposits) increased by LBP 512.29M ($34.15M), owing to a rise in Terms and saving deposits by LBP 123.16B and in deposits denominated in foreign currencies by $25.94M.
As such, the rate of broad money dollarization slightly increased from 91.244% in the week ending December 14, 2023 to 91.409% in the week ending December 21, 2023.
Looking at interest rates, the average rate on deposits in LBP at commercial banks increased from 0.7% in October 2022 to 1.02% in October 2023. In contrast, the average rate on deposits in USD at commercial banks decreased from 0.09% in October 2022 to 0.05% in October 2023. In its turn, the average lending rate in LBP and USD, at commercial banks, went down from 5% and 5.11% in October 2022 to 3.34% and 3.7%, respectively, in October 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 October 2023, M3 stood at LBP 1,161,336.8B versus LBP223,312.8B in October 2022: NFA were LBP 229,938.7B compared to LBP 16,444.4B in October 2022; CPS was LBP 125,628.4B compared to LBP 32,720.4B in October 2022; NCPS was LBP 810,804.7B compared to LBP 37,311.7B in October 2023; and OIN were negative LBP 5,035.1B compared to LBP 136836.3B in October 2022.
Source: BDL; MoF