All monetary aggregates ended the week of June 16, 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 banknotes on the sayrafa platform through banks to benefit from the Central Bank’s decision to facilitate USD banknotes purchase up to the ceilings set by banks, once per month, this till the end of June. This has prompted USD banknotes holders to sell and buy back the hard currency and realize immediate capital gains in Lebanese pound. The overall money supply, “M4”, narrowed by LBP 357.16 billion on a weekly basis and by 4.18% on an annual basis to LBP 205,535 billion, noting that the non-banking sector’s Treasury bills portfolio decreased by LBP 41 billion during the concerned week.

In parallel, Lebanese-Pound denominated deposits and currency in circulation, “M1”, contracted by LBP 60.19 million week-on-week to LBP 55,202 billion on the back of some LBP 43 billion decrease in demand deposits, coupled with the LBP 17 billion drop in currency in circulation. Local currency term deposits, “M2”, also fell by LBP 144.64 billion on a weekly basis and by 0.85% year-on-year to settle at LBP 74,060 billion.

Consequently, private sector term and saving deposits denominated in LBP (“M2-M1”) receded by LBP 84.44 billion (0.45%) to LBP 18,857 billion during the week of June 16, with deposits denominated in foreign currencies (“M3-M2”) sinking by LBP 170.98 billion (0.15%) to LBP 116,196 billion.