The “M1” monetary aggregate fell by 2.84% in March 2026 to LBP 104.76 trillion, down from LBP 107.82 trillion in the previous month, noting that it decreased by 12.07% y-o-y when benchmarked to the LBP 119.13 trillion level registered in March 2025. More specifically, demand deposits fell by 0.16% in March 2026 to LBP 45.36 trillion, coupled with a 4.80% drop in currency in circulation to LBP 59.40 trillion. It is worth noting that currency in circulation came in 23.71% lower on an annual basis when benchmarked to March 2025’s figure of LBP 77.85 trillion. The monthly and annual drop in the “M1” monetary aggregates can be attributed to the liquidity squeeze in LBP amid the outbreak of the war since the beginning of March. The chart below captures the monthly evolution of currency in circulation between March 2025 and March 2026:

The “M2” component, which adds term deposits in LBP to “M1”, fell by 1.04% in March 2026 to LBP 144.73 trillion down from LBP 146.25 trillion in February, noting that it stood at LBP 157.90 trillion in March 2025. As for the “M3” component, which adds deposits in foreign currencies and debt securities issued to the “M2” monetary aggregate, it fell by 0.62% month-on-month to LBP 5,941.79 trillion in March down from LBP 5,978.83 trillion in February. The overall money supply, “M4”, which adds LBP treasury bills held by the non-banking sector, also dropped by 0.62% between the third and second month of 2026, reaching LBP 5,946.03 trillion (compared to LBP 5,983.11 trillion in February) noting that the portfolio of LBP Treasury bills held by the non-banking sector dropped by 0.88% month-on-month to LBP 4.24 trillion.