The Lebanese Central Bank’s balance sheet conveys some $2.16 billion contraction in its foreign assets portfolio during the first half of July 2020 to $30.80 billion, down from $32.96 billion a fortnight earlier. This comes in tandem with the expansion of the subsidized program by the Ministry of Economy to cover more than 300 commodities in an endeavor to alleviate inflationary pressure on the local consumer.  When factoring out BDL’s portfolio of Lebanese Eurobonds amounting to $5.03 billion as per the disclosure made by the Central Bank, the latter’s foreign currency reserves would settle at $25.77 billion by mid-July. From another standpoint, gold reserves at BDL rose by 2.22% ($362.53 million) in the first half of July to $16.69 billion as gold prices increased as a result of renewed tensions between the US and China and a rise in COVID-19 cases.

On an annual basis, BDL’s foreign assets came in 16.80% ($6.22 billion) lower than the $37.02 billion reading reported in mid-July 2019. Conversely, the value of gold reserves soared by 27.88% ($3.64 billion) when benchmarked to the $13.05 billion figure recorded in the same period last year. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 147 months of debt service and constitute around 45.72% and 50.73% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet contracted by $0.25 billion during the first half of July to $151.76 billion owing to some 6.54% ($2.16 billion) drop in the value of foreign assets to $30.80 billion, coupled with a 0.23% decrease in loans to the local financial sector to $14.63 billion which outweighed the 2.22% rise in the value of gold reserves to $16.69 billion, the 3.09% ($1.52 billion) increase in the value of other assets to $50.61 billion representing capitalized  open market operations and seigniorage, and the 0.16% rise in the value of the securities portfolio to $38.76 billion.

The share of BDL’s foreign assets of the latter’s total assets dropped to 20.30% by mid-July 2020, compared to 21.68% by end of June, while the share of gold reserves expanded to 11.00% from 10.74% two weeks earlier.