During the week ending January 19, Broad Money M3 contracted by a weekly LBP139B ($90M) to reach LBP 199,348B ($132.24B). However, M3 recorded a 7.16% annual increase and a 0.15% rise since the start of the year.
M1 decreased by LBP 218B ($144M) over the same period to LBP 9,256B ($6.14B). This decrease is mainly attributed to the LBP 174B ($115.42M) drop in money in circulation and the drop by LBP 44B ($29.19M) in demand deposits.
Total deposits (excluding demand deposits) rose by LBP78.4B ($52M) during the week, as term and savings deposits denominated in local currency registered a large increase of LBP 133B ($88.23M), while deposits denominated in foreign currencies went down by $36M.
Over the above mentioned period, the broad money dollarization rate remained relatively unchanged from 58.99% on January 12th to 59% on January 19th. According to the Central Bank, the overnight interbank rate remained stable at 3% between October and November 2016.
In the Treasury Bills auction held on January 19th, 2017, the Ministry of Finance (MoF) raised LBP 394B ($261M), through the issuance of bills maturing in 6 months (6M) and notes maturing in 24M and 120M. The highest demand was achieved on the 24M notes, which held a 51.17% share of total subscriptions, while the 6M bills and 120M notes accounted for the remaining shares of 10.47% and 38.36%, respectively. The discount rate on the 6M bills stood at 4.87% while the coupon rate on the 24M and 120M notes registered 5.84% and 7.46%, respectively. New subscriptions exceeded existing maturities by LBP 186B ($123M).