Ministry of Finance (MoF) Raises LBP 803B through its February 15 Auction  

During the week ending on February 1, Broad Money (M3) grew by a weekly LBP 380B ($252M) to reach LBP 208,310B ($138B). On a yearly basis, M3 added 3.97% and marginally rose by 0.11% since the start of the year.

M1 increased by LBP 511B ($339M) to LBP 10,149B ($6.7B) over the week. The rise is attributed to a LBP 272B ($180M) incline in currency in circulation and a LBP 239B ($159M) growth in demand deposits.

Total deposits (excluding demand deposits) fell by LBP 130B ($86M) over the same week, on the back of Deposits denominated in foreign currencies falling by $70M and Term and savings deposits denominated in local currency (LBP) dropping LBP 25B ($16M) during the week.

The Broad Money dollarization rate fell from 61.93% last week to 61.78% by February 1. According to the Central Bank, the overnight interbank rate steadied at 4% in December 2017.

In the Treasury Bills Auction held on February 15, 2018, the Ministry of Finance (MoF) raised LBP 803B ($533M), through the issuance of bills maturing in 6 months (6M), as well as notes maturing in 2 year (2Y) and 10Y. The largest demand was achieved on the 10Y notes, which accounted for 43.62% of total subscriptions, while the 6M bills and 2Y notes accounted for the remaining shares of 12.78% and 43.60%, respectively. The discount rate on the 6M bills stood at 4.87%, while the coupon rate on the notes maturing in 2Y and 10Y stood at 5.84% and 7.46%, respectively. The new subscriptions exceeded the existing maturities by LBP 699B ($463M).


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