BDL’s monetary aggregates ended the month of January 2025 on a positive note. The “M1” component rose by 18.37% in January 2025 to LBP 121.59 trillion, up from LBP 102.72 trillion in December and LBP 85.75 trillion in January of the previous year. More specifically, currency in circulation soared by 33.68% in January 2025 to LBP 77.64 trillion, while demand deposits in LBP dropped by 1.54% to LBP 43.95 trillion. It is worth noting that currency in circulation came in 59.23% higher on an annual basis when compared to January 2024’s figure of LBP 48.76 trillion. The chart below captures the monthly evolution of currency in circulation between January 2024 and January 2025:

The spike in currency in circulation observed during the months of December 2024 and January 2025 may be attributed to a selling frenzy of US Dollar banknotes by some speculators betting on the upside of the Lebanese Pound/ USD exchange rate as the election of a Lebanese President and Prime Minister were imminent.

The “M2” component, which adds term deposits in LBP to “M1”, increased by 19.46% in January of the current year to LBP 156.47 trillion, up from LBP 130.99 trillion in December and LBP 100.78 trillion in January 2024. As for the “M3” component, which adds deposits in foreign currencies and debt securities issued to the “M2” monetary aggregate, it remained almost flat at just below LBP 6,214.00 trillion in January 2025. The overall money supply, “M4”, which adds LBP treasury bills held by the non-banking sector, also showed a relatively flat trend between the first month of 2024 and the first month of 2025 at just above LBP 6,223 trillion on the back of the shy appetite for Lebanese treasury bills.