During the week ending on the 18th of May 2017, Broad Money M3 rose by a weekly LBP 276B ($183M) to reach LBP 204,094B ($135B). Moreover, M3 recorded a 7.94% annual increase and a 2.54% rise since the start of the year.
M1 contracted by LBP 438B ($290M) over the same period to LBP 9,201B ($6B). The contraction is mainly attributed to a decrease in currency in circulation by LBP 119B ($79M) and a decline in demand deposits by LBP 318B ($211M).
Total deposits (excluding demand deposits) increased by LBP 714B ($474M) over the same period, as term and savings deposits denominated in local currency rose by LBP 128B ($85M) during the week, and deposits denominated in foreign currencies also expanded by $388M.
Over the above mentioned period, the broad money dollarization rate increased from 59.63% on May 11th to 59.84% by May 18th. 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 25th, 2017, the Ministry of Finance (MoF) raised LBP 428B ($284M), through the issuance of bills maturing in 6 months (6M) and notes maturing in 3 years (3Y) and 7 years (7Y).
The highest demand was achieved on the 3Y notes, which accounted for 48.04% of total subscriptions, while the 7Y notes represented 39.9% of total subscriptions and the 6 months bills accounted for the remaining 12.06%.
The discount rate on the 6M bills stood at 4.87%, while the coupon rate on the 3Y and 7Y notes stood at 6.5% and 7.08%, respectively. New subscriptions exceeded existing maturities by LBP 11.34B ($7.52M).