Ministry of Finance raised LBP 520B in its October 4th Auction

During the week ending October 18, Broad Money (M3) shrank by a weekly LBP 309B ($205M) to stand at LBP 211,342B ($140B). As such, M3 rose by an annual 1.03% and by      1.56% since December 2017.

In fact, M1 retreated by LBP 404B ($268M) during the week, to stand at LBP 10,745B ($7B). The decline in M1 was driven by downticks in both, demand deposits as well as currency in circulation by the respective amounts of LBP 209B ($139M) and LBP 195B ($129M), respectively.

Total deposits (excluding demand deposits) increased by LBP 95B ($63M) over the week on the back of the LBP 108B ($71M) rise in Term and saving deposits in LBP and the $8M fall in deposits denominated in foreign currencies.

As such, the rate of broad money dollarization grew from 62.96% to 63.05% this week. As for the overnight interbank rate, data from the central bank showed it steadied at 5% from July 2018 to August 2018.

In the Treasury Bills Auction held on October 4, 2018, the Ministry of Finance (MoF) raised LBP 520B ($345M), through the issuance of bills maturing in 3 months (3M) and 12 months (12M), and notes maturing in 5 years (5Y). The highest demand was achieved on the 12M bills, which accounted for 85.07% of total subscriptions, while the 3M bills and 5Y notes accounted for the remaining shares of 0.50% and 14.43%, respectively. The discount rate on the 3M bills and 12M bills stood at 4.39% and 5.08%, respectively, while the coupon rate on the notes maturing in 5Y at 6.74%.

 

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