During the week ending October 2, 2014, broad Money M3 dropped by LP 312B ($206.80M), to reach LP 174,916B ($116.03B). M3 growth rate reached 6.91% year-on-year and 4.38% since year start. In contrast, M1 grew by LP 548B ($363.48M) due to the increase in money in circulation by LP 357B ($236.82M) and in demand deposits by LP 191B ($126.70M).
Total deposits (excluding demand deposits) shrank by LP 859.69 ($570.28M), given the drop of term and saving deposits in domestic currency by LP 91B, and of deposits denominated in foreign currencies by $510M. Over the above mentioned period, the broad money dollarization went down from 59.14% to 58.81%. According to the Central Bank, the overnight interbank rate stood at 2.75% at the end of August 2014.
In the TBs auction held on the 16th of October 2014, the Ministry of Finance raised LP 554.86B ($368.07M), through the issuance of bills maturing in 1Y, 2Y and 3Y notes. The highest demand was achieved on the 3Y notes that took a share of 84.53%, while the 1Y bills and 2Y notes accounted for 5.47% and 10.00%, respectively. The 1Y bills yielded 5.08%. Meanwhile the average coupon rate for the 2Y and 3Y notes stood at 5.84% and 6.50%, respectively. New subscriptions exceeded maturing T-bills by LP 233.53B ($154.91 M).