Ministry of Finance Raised LBP 537B in its November 23rd T-Bills Auction

During the week of Nov. 9th – Nov. 16th 2017, Broad Money (M3) fell by a weekly LBP 1,466B ($972M) to reach LBP 206,600B ($137B). Nonetheless, on a yearly basis, M3 grew by 5.88% and by 3.8% since the start of the year.

Over the same period, M1 fell by LBP 253B ($168M) to LBP 9,562B ($6B). The downtick may be attributed to the LBP 161B ($107M) decrease in currency in circulation, alongside the LBP 92B ($61M) decline in demand deposits, respectively.

Total deposits (excluding demand deposits) fell by LBP 1,213B ($805M) over the same period, as term and savings deposits denominated in local currency (LBP) dropped by LBP 1,916B ($1.3B) during the week, while deposits denominated in foreign currencies rose by $466M.

The Broad Money dollarization rate rose from 60.78% on November 09, 2017 to 61.55% on November 16, 2017. According to the Central Bank, the overnight interbank rate steadied at 4% for the months of August and September 2017.

In the Treasury Bills Auction held on November 23, 2017, the Ministry of Finance (MoF) raised LBP 537B ($356M), through the issuance of bills maturing in 6 months (6M), notes maturing in 24 months (24M), and 10 year (10Y) bonds. The highest demand was achieved on the 10Y bonds which accounted for 84 % of total subscriptions, while the 6M bills and the 24M notes accounted for the remaining shares of 3.84% and 12.2%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rate on the notes maturing in 24M and 10Y stood at 5.84%, and 7.46%, respectively. Existing maturities exceeded new subscriptions by LBP 266B ($177M).

 

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