Ministry of Finance (MoF) Raises LBP 1,183B through its January 12th Auction

During the week ending January 5, Broad Money M3 rose by a weekly LBP 333B ($221M) to reach LBP 199,374B ($132B). As such, M3 recorded a 7.03% annual increase and a 7% rise since the start of the year.

M1 decreased by LBP 139B ($92M) over the same period to LBP 9,641B ($6.4B). This decrease may be attributed to the increase by LBP 20B ($13M) in money in circulation and the reduction by LBP 159B ($105M) in demand deposits.

Total deposits (excluding demand deposits) rose by LBP 472B ($313M) during the week, as deposits denominated in foreign currencies went up by $337M, while term and savings deposits denominated in local currency registered a decrease of LBP 36B ($24M).

Over the above mentioned period, the broad money dollarization rate rose from 58.77% on December 29th to 58.92% on January 5th. 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 12th, 2017, the Ministry of Finance (MoF) raised LBP 1,183B ($788M), through the issuance of bills maturing in 6 months (6M) and 12M and a note maturing in 60M. The highest demand was achieved on the 60M note, which held a 92.99% share of total subscriptions, while the 6M and 12M bills accounted for the remaining shares of 3.41% and 3.59%, respectively. The discount rate on the 6M and 12M bills stood at 4.39% and 5.08 respectively while the coupon rate on the 60M note registered 5.00%. New subscriptions exceeded existing maturities by LBP 932B ($618M).

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