Ministry of Finance Raised LBP 965B in its October 26th T-Bills Auction

During the week of 12 – 19 October 2017, Broad Money (M3) declined by a weekly LBP 32B ($21M) to reach LBP 208,876B ($139B). Nonetheless, M3 grew by 7.50% on a year-on-year basis and a similar 4.94% since the start of the year.

Over the same period, M1 contracted by LBP 291B ($193M) to LBP 9,692B ($6.43B). Its decline is mainly attributed to the decreases of LBP 150B ($99.5M) and LBP 141B ($93.5M) in demand deposits and in currency in circulation, respectively.

Total deposits (excluding demand deposits) rose by LBP 259B ($171.8M) over the same period, as term and savings deposits denominated in local currency (LBP) regressed by LBP 100B ($66.3M) during the week, while deposits denominated in foreign currencies increased by $238M.

The Broad Money dollarization rate marginally rose from 60.17% on October 12, 2017 to 60.35% on October 19, 2017. According to the Central Bank, the overnight interbank rate climbed from 3.75% to 4% between July 2017 and August 2017.

In the Treasury Bills Auction held on October 26, 2017, the Ministry of Finance (MoF) raised LBP 965B ($640M), through the issuance of bills maturing in 6 months (6M) and notes maturing in 24 months (24M) and 120 months (120M). The highest demand was achieved on the 120M notes which accounted for 49.85 % of total subscriptions, while the 24M bills and the 6M notes accounted for the remaining shares of 41.58% and 8.57%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rates on the notes maturing in 24M and 120M stood at 5.84% and 7.46%, respectively. New subscriptions exceeded existing maturities by LBP 468B ($310M).


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