Ministry of Finance (MoF) Raises LBP 349B through its January 5th Auction

During the week ending December 22, Broad Money M3 rose by a weekly LBP 2,613B ($1.7B) to reach LBP 199,301B ($132B). As such, M3 recorded a 7.24% annual increase and a 7% rise since the start of the year.

M1 also rose by LBP 619B ($411M) over the same period to LBP 9,930B ($6.6B). This increase may be attributed to the increase by LBP 12B ($8M) in money in circulation and the rise of LBP 607B ($403M) in demand deposits.

Total deposits (excluding demand deposits) increased by LBP 1,994B ($1.3B) during the week, as deposits denominated in foreign currencies went up by $1.1B, while term and savings deposits denominated in local currency registered an increase of LBP 282B ($187M).

Over the above mentioned period, the broad money dollarization rate rose from 58.66% on December 15th to 58.75% on December 22nd. 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 January 5th, 2017, the Ministry of Finance (MoF) raised LBP 349B ($232M), through the issuance of bills maturing in 6 months (6M) and notes maturing in 36M and 84M. The highest demand was achieved on the 36M notes, which held a 50.3% share of total subscriptions, while the 6M bills and 84M notes accounted for the remaining shares of 4.2% and 37.7%, respectively. The discount rate on the 6M bills stood at 4.99%, while the coupon rate on the 36M and 84M notes registered 6.50% and 7.08%, respectively. Existing maturities exceeded new subscriptions by LBP 424B ($281M).



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