A report issued by the Central Bank of Lebanon showed a decrease in foreign currency deposits by about $ 414 million. According to the report, the banking and monetary sector numbers for January 2021, show a large deficit in the balance of payments, a continuous shrinkage of deposits, additional recovery of loans, and further decline in interest rates, while Lebanese banks’ liquidity at foreign banks continued to rise moderately for the third month in a row.
The balance of payments recorded a deficit of $411 million in January 2021 as a result of the shrinking of the net foreign assets of the financial system. The net foreign assets of banks increased by 220 million dollars in the first month of the year, while the net foreign assets of the Banque du Liban shrank by 631 million dollars as a result of the support policy adopted by Banque du Liban.
The customers’ deposits recorded a further contraction in January, declining by $228 million, with foreign currency deposits falling by $414 million, while the deposits in Lebanese pounds rose by $187 million. The cumulative contraction in deposits amounted to nearly $35.4 billion since the beginning of 2019, equivalent to 20.3 percent, to reach $140.4 billion at the end of January 2021. While the dollarization rate of deposits was 80.2 percent in January, up by about 10 percent.
Source (Economic Bulletin Website, Edited)
