The Lebanese Central Bank’s balance sheet conveys some $508.51 million contraction in BDL’s foreign assets portfolio during the first half of June 2022 to $15.51 billion, down from $16.02 billion a fortnight earlier. When factoring the portfolio of Lebanese Eurobonds held by the Central Bank amounting to $5.03 billion, the latter’s foreign currency reserves would settle at $10.48 billion by mid-June. This is mainly attributed to the decision of BDL in late May to consent individual & institutional depositors to buy US Dollar bank notes up to certain ceilings specified by each bank on a case by case basis once per month and up until end of June. Similarly, the value of gold reserves at BDL fell by 1.58% ($270.21 million) in the first half of June to $16.82 billion as gold prices dropped after US comsumer price index showed an 8.6% rise in inflation during the month May prompting the Federal Reserve to hike interest rates by 75 bps.

On an annual basis, BDL’s foreign assets came in 25.59% ($5.33 billion) lower than the $20.84 billion reading reported as at mid-June 2021. Similarly, the value of gold reserves came in 2.25% ($0.39 billion) lower when benchmarked to the $17.20 billion figure recorded in the same period in 2021. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 177 months of debt service and constitute around 27.30% and 31.38% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet narrowed by $3.69 billion during the first half of June 2022 to $166.54 billion on the back of the 3.55% ($2.88 billion) contraction in the value of other assets (representing capitalized open market operations and seigniorage) to $78.38 billion, coupled with the 3.17% drop in the value of foreign assets to $15.51 billion, the 1.58% decrease in the value of gold reserves to $16.82 billion and the 0.26% drop in the value of loans to the local financial sector to $13.36 billion.

The share of BDL’s foreign assets of the latter’s total assets decreased to 9.31% as at mid-June 2022, compared to 9.41% a fortnight earlier, while the share of gold reserves rose to 10.10%, up from 10.04% as at end of May. The share of other assets reached 47.06% of BDL’s total balance sheet by mid-June 2022, down from 47.74% two weeks earlier.