Ministry of Finance Raised $318M in May 11th T-bills Auction

During the week ending on the 4th of May 2017, Broad Money M3 rose by a weekly LBP 243B ($161M) to reach LBP 203,303B ($135B). Moreover, M3 recorded a 7.73% annual increase and a 2.14% rise since the start of the year.

M1 expanded by LBP 290B ($192M) over the same period to LBP 9,638B ($6B).

The expansion is mainly attributed to an increase in currency in circulation by LBP 343B ($228M) which outweighed the LBP 53B ($35M) decrease in demand deposits.

Total deposits (excluding demand deposits) decreased by LBP 47B ($31M) over the same period, as term and savings deposits denominated in local currency regressed by LBP 194B ($129M) during the week, while deposits denominated in foreign currencies went up by $98M.

Over the above mentioned period, the broad money dollarization rate stabilized at 59.53%. According to the Central Bank, the overnight interbank rate remained stable at 3% between December 2016 and March 2017.

In the Treasury Bills auction held on May 11th, 2017, the Ministry of Finance (MoF) raised LBP 479B ($318M), through the issuance of bills maturing in 6 months (6M) and notes maturing in 2 years (2Y) and 10 years (10Y).

The highest demand was achieved on the 10Y notes, which accounted for 52% of total subscriptions, while the 2Y notes represented 37% of total subscriptions and the 6 months bills accounted for the remaining 11%.

The discount rate on the 6M bills stood at 4.87% while the coupon rate on the 2Y and 10Y notes stood at 5.84% and 7.46%, respectively. Existing maturities exceeded new subscriptions by LBP 91B ($60M).


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