All monetary aggregates ended the week of January 5, 2023 on a negative note. The overall money supply, “M4”, narrowed by LBP 2,703.19 billion on a weekly basis yet rose by 13.24% on an annual basis to LBP 242,829 billion, noting that the non-banking sector’s Treasury bills portfolio decreased by LBP 29 billion during the concerned week.

In parallel, Lebanese-Pound denominated deposits and currency in circulation, “M1”, dropped by LBP 2,360.13 billion week-on-week to LBP 94,723 billion on the back of some LBP 7,253 billion contraction in currency in circulation, outweighing the LBP 4,893 billion increase in demand deposits. It’s worth noting that the drop in the “M1” monetary aggregate during the concerned period is attributed in part to the Central Bank’s end of year 2022 initiative to increase the sayrafa limit for individual and corporate clients under the umbrella of which the latter was selling US Dollar banknotes to depositors at the sayrafa rate of LBP 38,000 per USD up to a certain limit. Local currency term deposits, “M2”, also fell by LBP 2,449.16 billion on a weekly basis yet rose by 44.02% year-on-year to settle at LBP 112,976 billion.

Consequently, private sector term and saving deposits denominated in LBP (“M2-M1”) narrowed by LBP 89.03 billion (0.49%) to LBP 18,253 billion during the week of January 5, with deposits denominated in foreign currencies (“M3-M2”) sinking by LBP 225.05 billion (0.20%) to LBP 111,693 billion.