Ministry of Finance (MoF) Raises LBP 260.5B through its November 17th Auction

During the week ending November 10, Broad Money M3 rose by a weekly LBP 61B ($41M) to reach LBP 194,321B ($129B). As such, M3 recorded a 5.50% annual increase and a 4.14% rise since the start of the year.

Moreover, M1 contracted by LBP 212B ($140M) over the same period to LBP 9,115B ($6B). This contraction may be attributed to the respective decreases of LBP 135B ($90M) and LBP 77B ($51M) in demand deposits and money in circulation.

Total deposits (excluding demand deposits) increased by LBP 273B ($181M) during the week, as deposits denominated in foreign currencies went up by $74M, and term and savings deposits denominated in local currency registered an increase of LBP 161B.

Over the above mentioned period, the broad money dollarization rate slightly rose from 58.31% on November 3rd to 58.35% on November 10th. 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 November 17, 2016, the Ministry of Finance (MoF) raised LBP 261B ($173M), 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 49.41% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 22.98% and 27.61%, respectively. The discount rates on the 3M and 12M bills stood at 4.39% and 5.08% respectively, and the coupon rate on 60M notes recorded 6.74%. New subscriptions exceeded existing maturities by LBP 178B ($118.08M).

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