The Lebanese Central Bank’s balance sheet conveys some $2.24 billion contraction in its foreign assets portfolio during the second half of September 2020 to $25.93 billion, down from $28.17 billion a fortnight earlier. This drop owes to the settlement of some $2.2 billion in foreign currency loans by banks to the Central Banks. 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 $20.90 billion by end of September. From another standpoint, gold reserves at BDL fell by 4.23% ($766.65 million) in the second half of September to $17.36 billion as gold prices dropped as a result of a small increase in interest rates in the United States.

On an annual basis, BDL’s foreign assets came in 32.68% ($12.29 billion) lower than the $38.51 billion reading reported at end of September 2019. Conversely, the value of gold reserves soared by 26.56% ($3.64 billion) when benchmarked to the $13.72 billion figure recorded in the same period last year. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 170 months of debt service and constitute around 40.82% and 45.43% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet contracted by $2.15 billion during the second half of September to $153.33 billion owing to the 7.95% drop in the value of foreign assets to $25.93 billion and the 4.23% decrease in the value of gold reserves to $17.36 billion which outweighed the 1.40% ($0.77 billion) rise in the value of other assets to $55.80 billion representing capitalized open market operations and seigniorage, coupled with a 0.15% hike in the value of the securities portfolio to $39.35 billion and the 0.15% increase in loans to the local financial sector to $14.62 billion.

The share of BDL’s foreign assets of the latter’s total assets dropped to 16.91% by end of September 2020, compared to 18.12% in mid-September, with the share of gold reserves also decreasing to 11.32% from 11.66% two weeks earlier.