During the week of 19 – 26 October 2017, Broad Money (M3) declined by a weekly LBP 418B ($277M) to reach LBP 208,458B ($138B). Nonetheless, M3 grew by 7.36% on a year-on-year basis and by 4.73% since the start of the year.
Over the same period, M1 contracted by LBP 86B ($57M) to LBP 9,606B ($6.37B). The decline is mainly attributed to the LBP 115B ($76M) decrease in currency in circulation which outweighed the LBP 29B ($19M) increase in demand deposits.
Total deposits (excluding demand deposits) fell by LBP 332B ($220M) over the same period, as term and savings deposits denominated in local currency (LBP) regressed by LBP 170B ($113M) during the week, while deposits denominated in foreign currencies slid by $108M.
The Broad Money dollarization rate marginally rose from 60.35% on October 19, 2017 to 60.39% on October 26, 2017. According to the Central Bank, the overnight interbank rate steadied at 4% for the months of August and September 2017.
In the Treasury Bills Auction held on November 02, 2017, the Ministry of Finance (MoF) raised LBP 553B ($367M), through the issuance of bills maturing in 3 months (3M) and notes maturing in 12 months (12M) and 60 months (60M). The highest demand was achieved on the 60M notes which accounted for 72.46 % of total subscriptions, while the 12M notes and the 3M bills accounted for the remaining shares of 23.86% and 3.68%, respectively. The discount rate on the 3M bills stood at 4.39% and at 5.08% for the 12M notes, while the coupon rate on the notes maturing in 60M stood at 6.74%, respectively. New subscriptions exceeded existing maturities by LBP 389B ($258M).