During the week ending August 25, broad Money M3 dropped LP 46B ($30M) from August 18 to reach LP 191,690B ($127B). As such, M3 recorded a 4.76% annual growth and a 2.73% rise since the start of the year.
Moreover, M1 rose LP 34B ($23M) over the same period to LP 8,885B ($6B). This drop can be attributed to the decrease in money in circulation by LBP 114B ($76M) and the increase in demand deposits by LBP 148B ($98M).
Total deposits (excluding demand deposits) declined by LP 80B ($53M) during the week, as deposits denominated in foreign currencies and term and saving deposits denominated in local currency registered respective falls of $36M and LP 26B.
Over the above mentioned period, the broad money dollarization rate decreased from 58.07% on August 18th to 58.06% on August 25th. According to the Central Bank, the overnight interbank fell from 3.25% in May 2016 to 3% in June 2016.
In the Treasury Bills’ auction held on August 25, 2016, the Ministry of Finance (MoF) raised LBP 334B ($222M), through the issuance of bills maturing in 3M and 12M and notes maturing in 60M. The highest demand was achieved on the 60M notes, which held a 45.27% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 15.25% and 39.48%, respectively. The discount rates on the 3M bills and 12M bills stood at 4.39% and 5.08%, respectively, while the coupon rate on the 60M notes registered 6.74%. New subscriptions exceeded existing maturities by LBP 212B ($141M).