During the week of Nov. 16th – Nov. 23rd 2017, Broad Money (M3) declined by a weekly LBP 529B ($351M) to reach LBP 206,071B ($137B). Nonetheless, on a yearly basis, M3 grew by 5.37% and by 3.53% since the start of the year.
Over the same period, M1 contracted by LBP 33B ($22M) to LBP 9,528B ($6B). The downtick may be attributed to the LBP 135B ($90M) decrease in currency in circulation, which outweighed the LBP 102B ($68M) decline in demand deposits.
Total deposits (excluding demand deposits) fell by LBP 495B ($328M) over the same period, as term and savings deposits denominated in local currency (LBP) dropped by LBP 1,214B ($805M) during the week, while deposits denominated in foreign currencies added $477M.
The Broad Money dollarization rate rose from 61.55% on November 16, 2017 to 62.05% on November 23, 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 23, 2017, the Ministry of Finance (MoF) raised LBP 537B ($356M), through the issuance of bills maturing in 6 months (6M), notes maturing in 24 months (24M), and 10 year (10Y) bonds. The highest demand was achieved on the 10Y bonds which accounted for 84 % of total subscriptions, while the 6M bills and the 24M notes accounted for the remaining shares of 3.84% and 12.2%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rate on the notes maturing in 24M and 10Y stood at 5.84%, and 7.46%, respectively. Existing maturities exceeded new subscriptions by LBP 266B ($177M).