The Lebanese Central Bank’s balance sheet conveys some $384.77 million contraction in its foreign assets portfolio during the second half of March 2021 to $22.15 billion, down from $22.54 billion a fortnight earlier. 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 $17.12 billion by end of March. Similarly, gold reserves at BDL fell by 1.71% ($399.60 million) in the second half of March to $15.54 billion as gold prices dropped sharply with the sizeable rise in U.S. government bond yields increasing the opportunity cost of holding the gold metal.

On an annual basis, BDL’s foreign assets came in 37.12% ($13.08 billion) lower than the $35.23 billion reading reported at end of March 2020. Conversely, the value of gold reserves soared by 4.88% ($0.72 billion) when benchmarked to the $14.82 billion figure recorded in the same period last year. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 187 months of debt service and constitute around 34.17% and 38.18% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet widened by $0.64 billion during the second half of March to $152.22 billion owing to the 2.34% ($1.36 billion) increase in the value of other assets representing capitalized open market operations and seigniorage to $59.35 billion and the 0.18% rise in the value of securities portfolio to $40.76 billion, which altogether outweighed the 1.71% drop in the value of foreign assets to $22.15 billion and the 2.51% decrease in the value of gold reserves to $15.54 billion.

The share of BDL’s foreign assets of the latter’s total assets fell to 14.55% by end of March 2021, compared to 14.87% by mid-March, with the share of gold reserves also dropping to 10.21% from 10.52% two weeks earlier.