Money Supply M3 Climbed to $186B by January 25, 2018

During the week ending on January 25th, Broad Money (M3) grew by a weekly LBP 280B ($186M) to reach LBP 207,930B ($138B). On a yearly basis, M3 added 3.82% but marginally slipped by 0.08% since the start of the year.

M1 declined by LBP 170B ($113M) to LBP 9,638B ($6.4B) over the week. The contraction is attributed to a LBP 129B ($86M) decrease in currency in circulation and a LBP 41B ($27M) decline in demand deposits.

Total deposits (excluding demand deposits) climbed by LBP 451B ($299M) over the same week, on the back of Deposits denominated in foreign currencies rising by $177M and Term and savings deposits denominated in local currency (LBP) adding LBP 183B ($121M) during the week.

The Broad Money dollarization rate increased from 61.88% last week to 61.93% by January 25th. According to the Central Bank, the overnight interbank rate steadied at 4% in December 2017.

In the Treasury Bills Auction held on January 25, 2018, the Ministry of Finance (MoF) raised LBP 295B ($196M), through the issuance of bills maturing in 3 months (3M) and 1 year (1Y), as well as notes maturing in 5Y. The largest demand was achieved on the 5Y notes, which accounted for 51% of total subscriptions, while the 3M and the 1Y bills accounted for the remaining shares of 27.5% and 21.5%, respectively. The discount rate on the 3M and 1Y bills stood at 4.39% and 5.08%, respectively, while the coupon rate on the notes maturing in 5Y stood at 6.74%. The new subscriptions exceeded the existing maturities by LBP 232B ($154M).


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