Money Supply M3 Up to $125.72B by May 26th, 2016

During the week ending May 26, broad Money M3 increased by LP 397B ($263.49M) to reach LP 189,526B ($125.72B). M3 registered a 4.77% yearly growth and a 1.57% year-to-date uptick.

Likewise, M1 rose by LP 95B ($62.74M) over the mentioned period, due to the LP 198B ($131.34M) increase in demand deposits which outweighed the LP 103B ($68.33M) decrease in money in circulation.

Total deposits (excluding demand deposits) grew by LP 302.8B ($200.86M) during the week, given the $173M growth in deposits denominated in foreign currencies and the LP 42B progress in term and saving deposits in LP.

Over the above mentioned period, the broad money dollarization rate went up from 57.99% on the 19th of May to 58.01% on the 26th of May. According to the Central Bank, the overnight interbank dropped from 4% in February 2016 to 3% in March 2016.

In the TBs auction held on the 19th of May, 2016, the Ministry of Finance (MoF) raised LP 90.94B ($60.32M), through the issuance of bills maturing in 3M and notes maturing in 1Y and 5Y. The highest demand was achieved on the 1Y notes, which grasped a 44.93% share of total subscriptions, while the 5Y notes and 3M bills captured the remaining shares of 42.41% and 12.66%, respectively. The discount rate on the 3M bills stood at 4.44%. Meanwhile the coupon rates on the 1Y notes and 5Y notes registered 5.35% and 6.74%, respectively. New subscriptions exceeded existing maturities by LP 47.27B ($31.36M).

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