During the two weeks ending October 16, 2014, broad Money M3 rose by LP 231B ($153.56M), to reach LP 175,148B ($116.18B). M3 growth rate reached 6.82% year-on-year and 4.52% since year start. In contrast, M1 declined by LP 336B ($223.07M) due to the decrease in money in circulation by LP 196B ($130.02M) and in demand deposits by LP 141B ($93.53M).
Total deposits (excluding demand deposits) grew by LP 567.77 ($376.63M), given the expansion of term and saving deposits in domestic currency by LP 187B, and of deposits denominated in foreign currencies by $253M. Over the above mentioned period, the broad money dollarization went up from 58.81% to 58.95%. 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 30th of October 2014, the Ministry of Finance raised LP 285.589B ($189.45M), through the issuance of bills maturing in 1 year and 2-year and 3-year notes. The highest demand was achieved on the 3Y notes that took a share of 75.86%, while the 1Y bills and 2-year notes accounted for 5.23% and 18.91%, respectively. The 1Y bills yielded 5.08%, while the average coupon rate for the 2Y notes and 3Y notes stood at 5.84% and 6.50%, respectively. New subscriptions exceeded maturing T-bills by LP 61.00B ($40.46M).