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 9th of June, 2016, the Ministry of Finance (MoF) raised LP 1,700.43B ($1.13B), 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 88.32% share of total subscriptions, while the 2Y notes and 6M bills captured the remaining shares of 10.78% and 0.90%, respectively. The discount rate on the 6M bills stood at 4.87%. 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 1,312.17B ($870.4M).