All monetary aggregates ended the week of June 9, 2022 on a negative note. The sharp drop in money supply may be attributed to the strong appetite of individual and corporate depositors to purchase US Dollar bank notes on the sayrafa platform through banks to benefit from the Central Bank decision to facilitate USD bank notes purchase up to the ceilings set by banks, once per month, and this till the end of June. This has prompted USD bank notes holders to sell and buy back the hard currency and make immediate capital gains in Lebanese pound. The overall money supply, “M4”, narrowed by LBP 2,369.51 billion on a weekly basis and by 4.04% on an annual basis to LBP 205,893 billion, noting that the non-banking sector’s Treasury bills portfolio decreased by LBP 8 billion during the concerned week.

In parallel, Lebanese-Pound denominated deposits and currency in circulation, “M1”, contracted by LBP 1,922.75 million week-on-week to LBP 55,263 billion on the back of some LBP 1,507 billion decrease in currency in circulation, coupled with the LBP 416 billion drop in demand deposits. Local currency term deposits, “M2”, also fell by LBP 2,083.48 billion on a weekly basis and by 0.43% year-on-year to settle at LBP 74,204 billion.

Consequently, private sector term and saving deposits denominated in LBP (“M2-M1”) receded by LBP 160.73 billion (0.84%) to LBP 18,942 billion during the week of June 9, with deposits denominated in foreign currencies (“M3-M2”) sinking by LBP 277.60 billion (0.24%) to LBP 116,367 billion.