Balance of payments surplus
for the first time since 2011

Financial inflows surge 37 percent

The net surplus in the balance of payments for the first eight months of 2016 was $366 million. This was the result of a 37 percent jump in financial inflows that have offset a ten percent widening in trade deficit. Financial inflows surged to $11.2 billion in the first eight months of 2016 from $8.2 billion in the same period last year.

The balance of payments recorded a substantial surplus of $1.8 billion in August resulting from the financial engineering operation of the Central Bank (BDL).

BDL’s financial engineering activity consisted of a swap operation with local banks worth $10 billion. The swap increased BDL’s foreign reserves and was a lucrative deal for the banks.

The balance of payments has been reporting deficits since 2011.

This improvement has reflected on the banking sector’s assets which grew by $9.8 billion in the first eight months of 2016 with almost half of the amount recorded in August. The growth in bank assets was $5.9 billion in the first eight months of 2015.

Deposits grew by $5.5 billion in the first eight months compared with an increase of $5.2 billion in the same period last year.

This happened following the recent financial engineering operation of BDL, some banks were creative and were able to attract more deposits from abroad, said Talal Baba, Chief Financial Officer at BLOM Bank.

Residents’ deposits increased by $4.5 billion in the first eight months while non-resident deposits grew by $1.1 billion. Most of deposits are by residents, non-resident deposits accounted for 21 percent of total deposits at the end of July.