During the second week of 2016 ending January 14th, broad Money M3 decreased by LP 352B ($233.69M) to reach LP 185,844B ($123.28B). M3 registered a 4.98% yearly growth and a 0.40% year-to-date downtick.
Similarly, M1 regressed by LP 248B ($164.23M) over the mentioned period, due to the decrease in demand deposits by LP 92B ($61.03M) and in money in circulation by LP 156B ($103.48M).
Total deposits (excluding demand deposits) dropped by LP 105B ($69.46M) during the week ending January 14th, given the $165M contraction in deposits denominated in foreign currencies, that exceeded the LP 144B increase in term and saving deposits in LP.
Over the above mentioned period, the broad money dollarization rate ticked down from 57.87% on the 7th of January, to 57.84% on the 14th 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 21st of January 2016, the Ministry of Finance (MoF) raised LP 456.27B ($302.67M), through the issuance of bills and notes maturing in 1Y and 7Y. The highest demand was achieved on the 7Y notes, which grasped a 85.10% share of total subscriptions, while the 1Y bills captured the remaining 14.90%. Coupon on the 1Y bills stood at 5.08%, while the yield on the 7Y notes was 7.08%. New subscriptions failed to exceed existing maturities with subscription over maturities standing at LP 107.79B ($71.50M).