T-bills Auction on July 14th, 2016 Raised LBP 347.09B

During the week ending July 7th, broad Money M3 shrank by LP 289B ($191.74M) from June 30 to reach LP 190,139B ($126.13B). However, M3 recorded a 4.65% annual growth and a 1.90% gain since the start of the year.

Also, M1 rose by LP 68B ($45.42M) over the same period. This can be justified by the rise in money in circulation by LBP 270B ($179.10M) and the decrease in demand deposits by LBP 202B ($134M).

Total deposits (excluding demand deposits) shrank by LP 357.52B ($237.16M) during the week, as deposits denominated in foreign currencies registered a $161M downtick, while deposits denominated in the local currency decreased by LBP 115B.

Over the above mentioned period, the broad money dollarization rate slightly decreased from 57.87% on June 30th to 57.83% on July 7th. According to the Central Bank, the overnight interbank rose from 3% in April 2016 to 3.25% in May 2016.

In the TBs auction held on July 14th, 2016, the Ministry of Finance (MoF) raised LBP 347.09B ($230.18M), through the issuance of bills maturing in 3M and 12M and notes maturing in 60M. The highest demand was achieved on the 60M notes, which held a 78.99% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 14.84% and 6.17%, respectively. The discount rates on the 3M bills and 12M bills stood at 4.39% and 5.08%, respectively, while the coupon rate of the 60M notes registered 6.74%. New subscriptions exceeded existing maturities by LBP 85.19B ($56.51M).

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