Ministry of Finance (MoF) Raises LBP 262B through its March 9th Auction

During the week ending March 2, Broad Money M3 increased by a weekly LBP651B ($432M) to reach LBP 201,456B ($133B). Moreover, M3 recorded a 8.16% annual increase and a 1.21% rise since the start of the year.

M1 expanded by LBP 416B ($278M) over the same period to LBP 9,482B ($6.29B). The rise is mainly attributed to the respective increases of LBP 288B ($191M) and LBP 128 ($85M) in money in circulation and in demand deposits.

Total deposits (excluding demand deposits) rose by LBP 235B ($156M) during the week, as term and savings deposits denominated in local currency dropped by LBP 6B ($4M) and deposits denominated in foreign currencies grew by $166M.

Over the above mentioned periaod, the broad money dollarization rate slightly dropped from 59.18% to stand at 59.11% on March 2. According to the Central Bank, the overnight interbank rate remained stable at 3% between November and December 2016.

In the Treasury Bills auction held on March 9, 2017, the Ministry of Finance (MoF) raised LBP 262B ($174M), through the issuance of bills maturing in 3 months (3M) and 12M and notes maturing in 60M. The highest demand was achieved on the 60M notes, which held a 38.79% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 30.98% and 30.23%, respectively. The discount rate on the 3M and 12M bills stood at 4.39% and 5.08% respectively while the coupon rate on the 60M notes registered 6.74%. Existing maturities exceeded new subscriptions by LBP 59B ($39M).


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