MoF Raised $423M in the Treasury Bills’ Auction Held on January 31th 2019

In the week ending January 24th 2019, Broad Money (M3) fell by a weekly LBP 642B ($426M) to stand at LBP 209,386B ($138.90B), adding 0.20% year-on-year (y-o-y) and decreasing by 1.29% since the start of the year.

In details, M1 contracted by LBP 201B ($133M) over the same week, to settle at LBP 9,865B ($6.54B). The contraction is attributed to the LBP 55B ($36.48M) decline in demand deposits, and in the currency in circulation by LBP 146B ($36.48M).

Over the week, total deposits (excluding demand deposits) slumped by LBP 441.18B ($292M). This drop was driven by a decline in deposits denominated in foreign currencies and term and saving deposits denominated in LBP by $72M and LBP 333B ($220M), respectively.

As such, the rate of broad money dollarization marginally rose to 64.50% in the week ending Jan. 24th 2019, up from 64.36% in the week ending Jan. 17rd 2019. In its turn, the average weekly interbank rate stood at 10% in the week ending Jan. 24th 2019 down from 25% compared to the previous week.

In the treasury bills (T-Bills) auction held on January 31th 2019, the Ministry of Finance raised  LBP 637.69B ($423.01M) through the issuance of bills maturing in 6 months (6M), as well as notes maturing in 3 years (3Y) and 7 years (7Y). The highest demand was achieved on bills maturing in 7Y, grasping a share of 70.1% of total subscriptions. Meanwhile, the 6M and 3Y bills accounted for the remaining stakes of 1.67% and 28.23%, respectively. The discount rates on the 6M bills stood at 5.68%, while the coupon rate on the notes maturing in 3Y and 7Y stood at 7.5% and 9%, respectively. New subscriptions were LBP 511.58B ($339.36M) below the existing maturities.

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