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The June balance sheet of Lebanon’s Central Bank (BDL) published in the Byblos Bank Group’s weekly economic report, Lebanon this Week, shows that the institution’s total assets stood at LBP 1,571 trillion on June 15, 2023, the equivalent of USD 104.7 billion. This represents a 1% increase on the LBP 1,556.2 trillion or USD 103.7 billion at the end of May. It should be noted that the exchange rate used is LBP 15,000 to the dollar. However, on the parallel market rate (LBP 93,000 on Wednesday), the BDL’s assets amounted to around USD 26 billion.
Mandatory foreign currency reserves stood at USD 14.41 billion in mid-June 2023, down USD 774.6 million or 5.1% compared to the end of 2022, and down 7.1% year-on-year. Foreign currency assets include Lebanese euro-bonds worth USD 5.03 billion, unchanged from last year. It should be noted that, on the market, this value is 6%, i.e. around USD 400 million.
Excluding Lebanese euro-bonds, BDL’s reserve requirements stood at USD 9.37 billion in mid-June 2023, a decrease of USD 50 million, or 0.5%, compared to the figure at the end of May 2023. The Central Bank’s foreign currency assets decreased by 7.6% compared to year-end 2022 and by 10.5% year-on-year.
In addition, the value of the Central Bank’s gold reserves stood at a new record of USD 17.8 billion in mid-June 2023, an increase of USD 1.2 billion, or 7.2% compared to the end of 2022. This is due to the rise of the price of gold on the world market.
The overall decrease in BDL’s foreign currency holdings over the past 12 months is due to the financing of imports of fuel, flour, medicines and medical equipment, subsidies for the household basket and raw materials used in the agricultural and industrial sectors, and the implementation of circulars issued by the institution allowing depositors to withdraw US dollars from their accounts or to purchase them from the BDL via commercial banks.
It is also attributed to the sharp decline in capital inflows to Lebanon since September 2019. However, the decline in BDL’s foreign currency holdings has been partially offset by USD 1.13 billion drawn from Lebanon’s Special Drawing Rights (SDRs) which was transferred from the International Monetary Fund (IMF) to BDL on September 16, 2021.
As for Lebanese pounds in circulation on the market, the BDL’s balance sheet shows that they stood at 79,501 billion in mid-June 2023, down 0.8% on the end of 2022 and up 106.7% year-on-year.
Total loans to the local financial sector stood at LBP 16,114.5 billion, or USD 1.1 billion in mid-June, and financial sector deposits at 1,343 billion, or USD 89.5 billion.
Total public sector deposits at the Central Bank amounted to LBP 104,693 billion in mid-June 2023, an increase of LBP 87,430.2 billion year-on-year.
The document also states that the Central Bank’s loans to the public sector amounted to LBP 249,295.2 billion (USD 16.6 billion) in mid-June 2023.
For information, the dollar figures up to the end of January 2023 are based on the official exchange rate of the Lebanese pound against the dollar of LBP 1,507.5 to the dollar, while the figures from February 2023 onwards are based on the new official exchange rate of LBP 15,000 to the dollar.
