Ministry of Finance Raised LBP 157B in its November 16th T-Bills Auction

During the week of Nov. 2nd  – Nov. 9th 2017, Broad Money (M3) fell by a weekly LBP 490B ($325M) to reach LBP 208,066B ($138B). Nevertheless, M3 rose by a yearly 6.88% and by 4.53% since the start of the year.

Over the same period, M1 contracted by LBP 286B ($190M) to LBP 9,814B ($6.5B). The downtick may be attributed to the LBP 40B ($27M) decrease in currency in circulation, alongside the LBP 246B ($163M) decline in demand deposits, respectively.

Total deposits (excluding demand deposits) fell by LBP 204B ($135M) over the same period, as term and savings deposits denominated in local currency (LBP) regressed by LBP 1,146B ($760M) during the week, which outweighed the increase by $625M recorded in deposits denominated in foreign currencies.

The Broad Money dollarization rate marginally grew from 60.2% on Nov. 02, 2017 to 60.8% on November 09, 2017. According to the Central Bank, the overnight interbank rate steadied at 4% for the months of August and September 2017.

In the Treasury Bills Auction held on November 16, 2017, the Ministry of Finance (MoF) raised LBP 157B ($104M), through the issuance of bills maturing in 3 months (6M) and notes maturing in 12 months (12M) and 60 months (60M). The highest demand was achieved on the 60M notes which accounted for 63.8 % of total subscriptions, while the 12M and the 60M notes accounted for the remaining shares of 30.80% and 5.40%, respectively. The discount rate on the 3M bills stood at 4.39%, while the coupon rate on the notes maturing in 12M and 60M stood at 5.35%, and 6.74%, respectively. New subscriptions exceeded the existing maturities by LBP 61B ($40M).

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