All monetary aggregates ended the week of June 23, 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 772.82 billion on a weekly basis and by 4.52% on an annual basis to LBP 204,763 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 600.43 million week-on-week to LBP 54,602 billion on the back of some LBP 801 billion decrease in demand deposits, outweighing the LBP 201 billion increase in currency in circulation. Local currency term deposits, “M2”, also fell by LBP 629.20 billion on a weekly basis and by 1.91% year-on-year to settle at LBP 73,431 billion.

Consequently, private sector term and saving deposits denominated in LBP (“M2-M1”) receded by LBP 28.77 billion (0.15%) to LBP 18,829 billion during the week of June 23, with deposits denominated in foreign currencies (“M3-M2”) sinking by LBP 135.38 billion (0.12%) to LBP 116,060 billion.