Ministry of Finance (MoF) Raised LBP 120B through its Auction on the 6th of October

During the week ending October 6, Broad Money M3 fell by a weekly LP 557B ($370M) to reach LP 193,954B ($129B). As such, M3 recorded a 5.40% annual increase and a 3.94% rise since the start of the year.

Moreover, M1 regressed by LP 92B ($61M) over the same period to LP 9,426B ($6B). This fall can be attributed to the drop of LBP 354B ($235M) in demand deposits and the rise of LBP 262B ($174M) in money in circulation.

Total deposits (excluding demand deposits) narrowed by LP 465B ($309M) during the week, as deposits denominated in foreign currencies and term and saving deposits denominated in local currency registered respective falls of  $265M and LP 65B.

Over the above mentioned period, the broad money dollarization rate fell from 58.03% on September 29th to 57.99% on October 6th. According to the Central Bank, the overnight interbank rate remained stable at 3% between July and August 2016.

In the Treasury Bills’ auction held on October 20, 2016, the Ministry of Finance (MoF) raised LBP 120B ($80M), 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 53.12% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 18.06% and 28.82%, respectively. The discount rates on the 3M and 12M bills stood at 4.39% and 5.08%, respectively, and the coupon rates on the 60M notes recorded 6.74%. New subscriptions lagged existing maturities by LBP 19B ($13M).

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