During the week ending April 28, broad Money M3 increased by LP 1,101B ($730.34M) to reach LP 188,621B ($125.12B). M3 registered a 6.78% yearly growth and a 1.08% year-to-date uptick. Similarly, M1 expanded by LP 554B ($367.81M) over the mentioned period, due to the increase in money in circulation by LP 160B ($106.14M) and the increase in demand deposits by LP 394B ($261.36M). Total deposits (excluding demand deposits) grew by LP 546.50B ($362.52M) during the week, given the $253M growth in deposits denominated in foreign currencies and the LP 165B progress in term and saving deposits in LP.
Over the above mentioned period, the broad money dollarization rate went down from 57.96% on the 21st of April to 57.83% on the 28th of April. According to the Central Bank, the overnight interbank rate increased from 3% end of January 2016 to 4% in February 2016.
In the TBs auction held on the 12th of May, 2016, the Ministry of Finance (MoF) raised LP 876.40B ($581.36M), through the issuance of bills maturing in 6M and notes maturing in 2Y and 10Y. The highest demand was achieved on the 10Y notes, which grasped a 94.01% share of total subscriptions, while the 6M bills and 2Y notes captured the remaining shares of 1.44% and 4.55%, respectively. The discount rate on the 6M bills stood at 4.99%. Meanwhile the coupon rates on the 2Y notes and 10Y notes registered 5.84% and 7.46%, respectively. New subscriptions exceeded existing maturities by LP 175.94B ($116.70M).