Ministry of Finance’s T-bills Auction on August 4th 2016 Raised LBP 432.91B

During the week ending July 21st, broad Money M3 dropped by LP 113B ($74.96M) from July 14 to reach LP 190,210B ($126.18B) on July 21. As such, M3 recorded a 4.54% annual growth and a 1.94% rise since the start of the year.

Moreover, M1 shrank by LP 287B ($190.26M) over the same period. This decrease can be attributed to the fall in money in circulation by LBP 128B ($84.91M) and in demand deposits by LBP 159B ($105.47M).

Total deposits (excluding demand deposits) increased by LP 174.30B ($115.62M) during the week, as deposits denominated in foreign currencies registered a $123M rise, while deposits denominated in the local currency decreased by LBP 11B.

Over the above mentioned period, the broad money dollarization rate slightly increased from 57.87% on July 14th to 58.00% on July 21st. According to the Central Bank, the overnight interbank rose from 3% in April 2016 to 3.25% in May 2016.

In the TBs auction held on August 4, 2016, the Ministry of Finance (MoF) raised LBP 432.91B ($287.71M), through the issuance of bills maturing in 6M and notes maturing in 24M and 120M. The highest demand was achieved on the 24M notes, which held a 52.58% share of total subscriptions, while the 6M bills and 120M notes accounted for the remaining shares of 2.74% and 44.68%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rates on the 24M and 120M notes registered 5.84% and 7.46%, respectively. New subscriptions exceeded existing maturities by LBP 162.64B ($107.89M).

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