During the first week of 2016 ending January 7th, broad Money M3 decreased by LP 401B ($266.11M) to reach LP 186,196B ($123.51B). M3 registered a 5.07% yearly growth and a 0.21% year-to-date downtick.
Similarly, M1 regressed by LP 142B ($94.29M) over the mentioned period, due to the decrease in demand deposits by LP 80B ($53.07M) and in money in circulation by LP 62B ($41.13M).
Total deposits (excluding demand deposits) dropped by LP 259B ($171.81M) during the week ending January 7th, given the $246M contraction in deposits denominated in foreign currencies, that exceeded the LP 111B increase in term and saving deposits in LP.
Over the above mentioned period, the broad money dollarization rate ticked down from 57.94% on December 31st, to 57.87% on the 7th of January. According to the Central Bank, the overnight interbank rate steadied at 3.00% by the end of October 2015.
In the TBs auction held on the 14th of January 2016, the Ministry of Finance (MoF) raised LP 367.82B ($243.99M), through the issuance of bills and notes maturing in 3M and 2Y. The highest demand was achieved on the 2Y notes, which grasped a 68.20% share of total subscriptions, while the 3M bills captured the remaining 31.80%. Yields on the 3M bills stood at 4.39%, while the coupon rate on the 2Y notes was 5.84%.