Ministry of Finance (MoF) Raises LBP 684B through its Auction on Aug. 3rd

During the week of 20 to 27 July 2017, Broad Money M3 decreased by a weekly of LBP 593B ($393M) to reach LBP 190,843B ($126.6B). In addition, M3 recorded growth rates of 8.60% on a year-on-year basis and 4.13% since the start of the year.

Over the same period, M1 contracted by LBP 555B ($368M) to LBP 9,244B ($6.1B). This decrease is mainly due to a LBP 679B ($450.4M) decline in currency in circulation, while demand deposits rose by LBP124B ($82.3M).

Total deposits (excluding demand deposits) decreased by LBP 38B ($25.4M) over the same period, as term and savings deposits denominated in local currency fell by LBP 250B ($165.8M) during the week, and deposits denominated in foreign currencies climbed by $141M.

The Broad Money dollarization rate dropped from 59.86% on July 20th to 57.89% on July 27th. According to the Central Bank, the overnight interbank rate remained stable at 3% between December 2016 and May 2017.

In the Treasury Bills auction held on Aug. 3, 2017, the Ministry of Finance (MoF) raised LBP 684B ($454M), through the issuance of bills maturing in 6 months (6M), in addition to notes maturing in 24M and 120M. The highest demand was achieved on the 120M notes, which grasped a 49.85% stake of total subscriptions, while the 6M bills and 24M notes accounted for the remaining shares of 13.5% and 36.65%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rates on the 24M and 120M notes stood at 5.84% and 7.46%, respectively. Existing maturities exceeded new subscriptions by LBP 114B ($76M).

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