Ministry of Finance (MoF) Raises LBP 193B through its December 22nd Auction

During the week ending December 15, Broad Money M3 rose by a weekly LBP 753B ($502M) to reach LBP 195,935B ($131B). As such, M3 recorded a 6.06% annual increase and a 5.88% rise since the start of the year.

In contrast, M1 rose by LBP 113B ($75M) over the same period to LBP 9,311B ($6.2B). This increase may be attributed to the contraction of LBP 69B ($46M) in money in circulation and the rise of LBP 182B ($121M) in demand deposits.

Total deposits (excluding demand deposits) increased by LBP 640B ($427M) during the week, as deposits denominated in foreign currencies went up by $392M, while term and savings deposits denominated in local currency registered an increase of LBP 48B.

Over the above mentioned period, the broad money dollarization rate rose from 58.58% on December 8th to 58.66% on December 15th. According to the Central Bank, the overnight interbank rate remained stable at 3% between September and October 2016.

In the Treasury Bills auction held on December 22nd, 2016, the Ministry of Finance (MoF) raised LBP 193B ($129M), through the issuance of bills maturing in 6M and notes maturing in 24M and 120M. The highest demand was achieved on the 120M notes, which held a 53.87% share of total subscriptions, while the 6M bills and 24M notes accounted for the remaining shares of 6.94% and 39.12%, respectively. The discount rates on the 6M bills stood at 4.87%, while the coupon rate on the 24M and 120M notes registered 5.84% and 7.46%, respectively. Existing maturities exceeded new subscriptions by LBP 284B ($189M).

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