The Lebanese Central Bank’s balance sheet conveys a rare $278.02 million expansion in BDL’s foreign assets portfolio during the second half of September 2022 to $14.90 billion, up from $14.62 billion a fortnight earlier. When factoring out the portfolio of Lebanese Eurobonds held by the Central Bank amounting to $5.03 billion, the latter’s foreign currency reserves would settle at $9.87 billion by end of September. Conversely, the value of gold reserves at BDL fell by 3.41% ($150.69 million) in the second half of September to $15.42 billion as gold prices dropped to a six-month low amid a stronger US Dollar and prospects of further interest rate hikes.

On an annual basis, BDL’s foreign assets came in 20.72% ($3.89 billion) lower than the $18.79 billion reading reported at end of September 2021. Similarly, the value of gold reserves settled 3.41% ($0.54 billion) lower when benchmarked to the $15.96 billion figure recorded in the same period in 2021. It is worth noting that BDL’s total reserves (foreign currency and gold) cover some 163 months of debt service and constitute around 25.02% and 29.05% of Lebanon’s gross and net public debt on a respective basis.

In a related note, BDL’s balance sheet widened by 5.26% ($8.92 billion) on a biweekly basis to $178.32 billion mainly on the back of the $9.17 billion (10.85%) increase in other assets (representing capitalized open market operations and seigniorage) which was met by a similar expansion in currency in circulation outside BDL. This increase can be attributed to the printing of some LBP 13 trillion in LBP banknotes. The increase in other assets was coupled by a 1.90% expansion in the value of foreign assets to $14.90 billion outweighing the 0.46% decrease in the value of the securities portfolio to $41.06 billion, the 0.97% drop in the value of gold reserves to $15.42 billion, the 1.49% contraction in loans to the local financial sector to $12.89 billion.

The share of BDL’s foreign assets of the latter’s total assets decreased to 8.36% as at end of September 2022, compared to 8.63% a fortnight earlier, with that of gold reserves concurrently dropping to 8.65%, down from 9.19% two weeks earlier. The share of other assets of BDL’s total balance sheet rose to 52.57% by end of September 2022, up from 49.92% two weeks earlier.