During the week ending January 26, Broad Money M3 contracted by a weekly LBP164B ($110M) to reach LBP 199,184B ($132.13B). However, M3 recorded a 7.14% annual increase and a 0.07% rise since the start of the year.
M1 contracted by LBP 272B ($180M) over the same period to LBP 8,984B ($5.96B). The decrease is mainly attributed to the LBP 115B ($76.29M) drop in money in circulation and the drop by LBP 157B ($104.15M) in demand deposits.
Total deposits (excluding demand deposits) rose by LBP107.96B ($70M) during the week, as term and savings deposits denominated in local currency registered a decrease of LBP 77B ($51.08M); however, deposits denominated in foreign currencies rose by a larger magnitude of $123M.
Over the above mentioned period, the broad money dollarization rate rose slightly from 59% to stand at 59.15% on January 26th. According to the Central Bank, the overnight interbank rate remained stable at 3% between October and November 2016.
In the Treasury Bills auction held on February 2, 2017, the Ministry of Finance (MoF) raised LBP 347B ($230M), through the issuance of bills maturing in 6M and notes maturing in 36M and 84M. The highest demand was achieved on the 36M notes, which held a share of 50.63% of total subscriptions, while the 6M bills and 84M notes accounted for the remaining shares of 11.85% and 37.52%, respectively. The discount rate on the 6M bills stood at 4.87% while the coupon rate on the 36M and 84M notes registered 6.5% and 7.08%, respectively. New subscriptions lagged behind existing maturities by LBP 299B ($198M).