All monetary aggregates ended the week of March 9, 2023 on a negative note. The overall money supply, “M4”, narrowed by LBP 10,015.87 billion on a weekly basis to LBP 1,223.16 trillion, notwithstanding the LBP 283 billion decrease in the non-banking sector’s Treasury bills portfolio during the concerned week. It is worth noting that as of the beginning February 2023, the official exchange rate was adjusted to LBP 15,000 per US Dollar.

In parallel, Lebanese-Pound denominated deposits and currency in circulation, “M1”, fell by LBP 7,684.91 billion week-on-week to LBP 90,983 billion on the back of some LBP 14,027 billion drop in currency in circulation which outweighed the LBP 6,342 billion rise in demand deposits. The decrease in the “M1” monetary aggregate can be partly explained by the drop in currency in circulation outside the Central Bank at a time when the latter was collecting LBP banknotes from customers eager to purchase USD banknotes at the sayrafa rate following the Central Bank’s decision to increase the sayrafa limits to LBP 1 billion and LBP 10 billion for individual and institutional depositors respectively in early March. Local currency term deposits, “M2”, also contracted by LBP 7,672.01 billion on a weekly basis to settle at LBP 108,936 billion.

Consequently, private sector term and saving deposits denominated in LBP (“M2-M1”) widened by LBP 12.89 billion (0.07%) to LBP 17,952 billion during the week of March 9, while deposits denominated in foreign currencies (“M3-M2”) sank by LBP 2,626.66 billion (0.24%) to LBP 1,094.80 trillion.