Ministry of Finance’s T-bills Auction on August 11th 2016 Raised LBP 280.21B

During the week ending August 4, broad Money M3 increased by LP 490B ($325.11M) from July 28 to reach LP 190,743B ($126.53B). As such, M3 recorded a 4.65% annual growth and a 2.22% rise since the start of the year.

Moreover, M1 grew by LP 406B ($269.33M) over the same period to LP 9,149B ($6.07B). This increase can be attributed to the rise in money in circulation by LBP 338B ($224.21M) and in demand deposits by LBP 68B ($45.11M).

Total deposits (excluding demand deposits) increased by LP 84B ($55.78M) during the week, as deposits denominated in foreign currencies and deposits denominated in the local currency registered respective increases of  $45M and LP 17B.

Over the above mentioned period, the broad money dollarization rate slightly dropped from 57.97% on July 28th to 57.86% on August 4th. According to the Central Bank, the overnight interbank fell from 3.25% in May 2016 to 3 % in June 2016.

In the TBs auction held on August 11, 2016, the Ministry of Finance (MoF) raised LBP 280.21B ($185.88M), 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 53.84% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 18.09% and 28.07%, respectively. The discount rates on the 3M and 12M bills stood at 4.39% and 5.08%, respectively, while the coupon rate on the 60M notes registered 6.74%. New subscriptions exceeded existing maturities by LBP 104.35B ($69.22M).


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