Broad Money M3 Increased by $103M during the Week Ending August 20

During the week ending August 20, 2015, broad Money M3 increased by LP 155B ($102.53M), to reach LP 182,245B ($120.89B) posting a 4.57% yearly growth and a 2.73% y-t-d uptick. In contrast, M1 decreased by LP 56B ($36.87M) over the week due to the decline in money in circulation by LP 113B ($74.96M), which offset the LP 57B ($37.81M) increase in demand deposits.

Total deposits (excluding demand deposits) increased by LP 210B ($139.39M), over the week, given the LP77B growth in term and saving deposits in LP and the $89M expansion in deposits denominated in foreign currencies. Over the above mentioned period, the broad money dollarization rate experienced an uptick from 58.11% on August 13, to 58.13% on August 20. According to the Central Bank, the overnight interbank rate steadied at 2.75% at the end of June 2015.

In the TBs auction held on the 27th of August 2015, the Ministry of Finance raised LP 165B ($110.04M), through the issuance of bills and notes maturing in 3M, 1Y and 5Y. The highest demand was achieved on the 5Y notes, which grasped 87.46% share of total subscriptions, while the 1Y and 3M bills captured the remaining 9.21% and 3.33%, respectively. The 3M and 1Y bills respectively yielded 4.39% and 5.08%, while the coupon rate on the 5Y notes stood at 6.74%.


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