The “M1” fell by 2.08% in February 2025 to LBP 119.06 trillion, down from LBP 121.59 trillion in the previous month, noting that it increased by 42.82% y-o-y when compared to the LBP 83.36 trillion level registered in February of the previous year. More specifically, currency in circulation dropped by 0.57% in February of the current year to LBP 77.19 trillion, with demand deposits in LBP decreasing by 4.75% to LBP 41.86 trillion. It is worth noting that currency in circulation came in 60.01% higher on an annual basis when compared to February 2024’s figure of LBP 48.24 trillion. The chart below captures the monthly evolution of currency in circulation between February 2024 and February 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 back then.

The “M2” component, which adds term deposits in LBP to “M1”, decreased by 0.05% in February of the current year to LBP 156.39 trillion, down from LBP 156.47 trillion in January of the same year, noting that it stood at LBP 98.40 trillion in February 2024. As for the “M3” component, which adds deposits in foreign currencies and debt securities issued to the “M2” monetary aggregate, it rose by 0.16% month-on-month to LBP 6,223.75 trillion in February 2025. The overall money supply, “M4”, which adds LBP treasury bills held by the non-banking sector, also showed a slight 0.15% increase between the second and first months of 2025, reaching LBP 6,232.60 trillion notwithstanding the 4.12% drop in the portfolio of LBP Treasury bills held by the non-banking sector to LBP 8.85 trillion.