Broad Money Expanded by LP 208B During the Week Ending October 29

During the week ending October 29, 2015, broad Money M3 expanded by LP 208B ($137.94M), to reach LP 183,869B ($121.97B) posting a 5.12 % yearly growth and a 3.65% y-t-d uptick. Similarly, M1 increased by LP 301B ($199.81M) over the mentioned period, due to the progression in demand deposits by LP 333B ($220.90M) and the LP 32B ($21.23M) contraction in money in circulation.

Total deposits (excluding demand deposits) declined by LP 93B ($61.69M) during the week ending October 29, given the $92M contraction in deposits denominated in foreign currencies which offset the LP 45B growth in term and saving deposits in LP. Over the above mentioned period, the broad money dollarization rate experienced a downtick from 57.87% on October 22 to 57.73% on October 29. According to the Central Bank, the overnight interbank rate increased from 2.75% at the end of August 2015 to 3.00% at end September.

In the TBs auction held on the 5th of November 2015, the Ministry of Finance (MoF) raised LP 201B ($133.33M), through the issuance of bills and notes maturing in 3M, 1Y and 5Y. The highest demand was achieved on the 5Y notes, which grasped 73.63% share of total subscriptions, while the 1Y and 3M bills captured the remaining 20.40% and 5.97%, respectively. The 3M and 1Y bills yielded at respective levels of 4.39% and 5.08%, while the coupon rate on the 5Y notes stood at 6.74%. 

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