Broad Money Supply M3 Down by $100M by February 22  

During the week ending on February 22, Broad Money (M3) fell by a weekly LBP 244B ($162M) to reach LBP 208,339B ($138B). On a yearly basis, M3 added 3.42% and marginally rose by 0.12% since the start of the year.

M1 regressed by LBP 151B ($100M) to LBP 9,781B ($6.5B) over the week. The contraction is attributed to a LBP 156B ($103M) decline in currency in circulation and a LBP 5B ($3M) growth in demand deposits.

Total deposits (excluding demand deposits) dropped by LBP 92B ($61M) over the same week, on the back of a fall of $198M in Deposits denominated in foreign currencies and a weekly uptick of LBP 206B ($137M) in Term and savings deposits denominated in local currency (LBP).

The broad money dollarization rate dropped from 61.83% last week to 61.76% by February 22. According to the Central Bank, the overnight interbank rate steadied at 4% in December 2017.

In the Treasury Bills Auction held on February 15, 2018, the Ministry of Finance (MoF) raised LBP 803B ($533M), through the issuance of bills maturing in 6 months (6M), as well as notes maturing in 2 year (2Y) and 10Y. The largest demand was achieved on the 10Y notes, which accounted for 43.62% of total subscriptions, while the 6M bills and 2Y notes accounted for the remaining shares of 12.78% and 43.60%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rate on the notes maturing in 2Y and 10Y stood at 5.84% and 7.46%, respectively. The new subscriptions exceeded the existing maturities by LBP 699B ($463M).


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