The Lebanese Central Bank’s balance sheet conveys some $1,641.25 million contraction in its foreign assets portfolio during the first half of September 2021 to $17.93 billion, down from $19.57 billion a fortnight earlier. The Central Bank attributed the drop in foreign assets to “foreign securities offset by a decrease in foreign currency liabilities”. 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 $12.90 billion by mid-September. Similarly, the value of gold reserves at BDL decreased by 0.72% ($121.18 million) in the first half of September to $16.61 billion as gold prices fell due to lower than expected rise in the US consumer price index.

On an annual basis, BDL’s foreign assets came in 36.35% ($10.24 billion) lower than the $28.17 billion reading reported as at mid-September 2020. Moreover, the value of gold reserves dropped by 8.36% ($1.52 billion) when benchmarked to the $18.13 billion figure recorded in the same period last year. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 165 months of debt service and constitute around 30.19% and 33.96% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet fell by $691.90 million during the first half of September to $159.06 billion on the back of the 8.39% ($1.64 billion) plunge in the value of foreign to $17.93 billion coupled with the 0.72% contraction in the value of gold reserves to $16.61 billion and the 0.29% drop in loans to the local financial sector to $13.87 billion which altogether outweighed the 1.51% rise in the value of other assets (representing capitalized open market operations and seigniorage) to $69.59 billion and the 0.19% increase in the value of securities portfolio to $40.79 billion.

The share of BDL’s foreign assets of the latter’s total assets fell to 11.27% by mid-September 2021, compared to 12.25% by end of August, with the share of gold reserves also dropping to 10.44% from 10.47% two weeks earlier. The share of other assets, on the other hand, continued its upturn reaching 43.75% of BDL’s total balance sheet.