Ministry of Finance (MoF) Raises LBP 304B through its December 8th Auction

During the week ending November 24, Broad Money M3 rose by a weekly LBP 217B ($144M) to reach LBP 194,787B ($129.21B). As such, M3 recorded a 5.59% annual increase and a 4.39% rise since the start of the year.

In contrast, M1 contracted by LBP 44B ($29M) over the same period to LBP 8,851B ($5.9B). This contraction may be attributed to the decrease of LBP 97M ($64M) in money in circulation and the rise of LBP 53B ($35M) in demand deposits.

Total deposits (excluding demand deposits) increased by LBP 261B ($173M) during the week, as deposits denominated in foreign currencies went up by $270M, while term and savings deposits denominated in local currency registered a decrease of LBP 146B.

Over the above mentioned period, the broad money dollarization rate rose from 58.43% on November 17th to 58.57% on November 24th. According to the Central Bank, the overnight interbank rate remained stable at 3% between August and September 2016.

In the Treasury Bills auction held on December 8, 2016, the Ministry of Finance (MoF) raised LBP 304B ($202M), 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 59.35% share of total subscriptions, while the 6M bills and 84M notes accounted for the remaining shares of 4.30% and 36.35%, respectively. The discount rates on the 6M bills stood at 4.87%, while the coupon rate on the 36M and 84M notes registered 6.50% and 7.08%, respectively. New subscriptions exceeded existing maturities by LBP 30B ($20M).


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