Ministry of Finance Raised LBP 607B in its Dec.07th 2017 T-Bills Auction

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) increase 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 December 07, 2017, the Ministry of Finance (MoF) raised LBP 607B ($403M), through the issuance of bills maturing in 3 months (3M), and notes maturing in 3 years (3Y) and 7Y. The highest demand was achieved on the 3Y notes, which accounted for 66% of total subscriptions, while the 3M bills and the 7Y notes accounted for the remaining shares of 3.4% and 30.6%, respectively. The discount rate on the 3M bills stood at 4.87%, while the coupon rate on the notes maturing in 3Y and 7Y stood at 6.5%, and 7.08%, respectively. New subscriptions exceeded existing maturities by LBP 299B ($199M).


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