The Lebanese Central Bank’s balance sheet conveys some $171.62 million contraction in BDL’s foreign assets portfolio during the second half of June 2022 to $15.34 billion, down from $15.51 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 $10.31 billion by end of June. June’s drop in BDL’s foreign assets is mainly attributed to the decision of BDL since late May to consent individual & institutional depositors to buy US Dollar bank notes up to certain ceilings specified by banks once per month and up until end of June. The caps on such transactions, however, have been reduced during the second half of June, which explains the slower pace of drop in BDL’s foreign assets after June 15. Overall, BDL’s foreign assets fell by $680.13 million in June, compared to a drop of $234.12 million in May. Similarly, the value of gold reserves at BDL fell by 0.51% ($86.23 million) in the second half of June to $16.73 billion pursuant to the contraction in in the US GDP and a drop in consumer confidence.

On an annual basis, BDL’s foreign assets came in 25.38% ($5.22 billion) lower than the $20.56 billion reading reported as at end of June 2021. On the other hand, the value of gold reserves came in 3.20% ($0.52 billion) higher when benchmarked to the $16.21 billion figure recorded in the same period in 2021. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 176 months of debt service and constitute around 27.04% and 31.08% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet widened by $83.11 million during the second half of June 2022 to $166.63 billion on the back of the 0.57% ($0.45 billion) increase in the value of other assets (representing capitalized open market operations and seigniorage) to $78.83 billion, which outweighed the 1.11% drop in the value of foreign assets to $15.34 billion, the 0.25% decrease in the value of the securities portfolio to $42.07 billion and the 0.51% contraction in the value of gold reserves to $16.73 billion.

The share of BDL’s foreign assets of the latter’s total assets decreased to 9.20% as at end of June 2022, compared to 9.31% a fortnight earlier, with that of gold reserves also dropping to 10.04%, down from 10.10% as at mid-June. The share of other assets extended its upturn, reaching 47.31% of BDL’s total balance sheet by end of June 2022, up from 47.06% two weeks earlier.