Ministry of Finance’s T-bills Auction on July 21st 2016 Raised LBP 635.13B

During the week ending July 14th, broad Money M3 grew by LP 184B ($122.20M) from July 7 to reach LP 190,323B ($126.25B). As such, M3 recorded a 4.68% annual growth and a 2% rise since the start of the year.

However, M1 shrank by LP 141B ($93.67M) over the same period. This decrease can be attributed to by the fall in money in circulation by LBP 179B ($118.74M) and the increase in demand deposits by LBP 38B ($25.21M).

Total deposits (excluding demand deposits) increased by LP 325.42B ($215.86M) during the week, as deposits denominated in foreign currencies registered a $118M rise, and deposits denominated in the local currency also increased by LBP 148B.

Over the above mentioned period, the broad money dollarization rate slightly increased from 57.83% on July 7th to 57.87% on July 14th. 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 21st, 2016, the Ministry of Finance (MoF) raised LBP 635.51B ($418.91M), through the issuance of bills maturing in 6M and notes maturing in 36M and 84M. The highest demand was achieved on the 36M notes, which held a 64.02% share of total subscriptions, while the 6M bills and 84M notes accounted for the remaining shares of 1.81% and 34.17%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rates of the 36M and 80M notes registered 6.5% and 7.08%, respectively. New subscriptions exceeded existing maturities by LBP 411.51B ($272.96M).



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