Ministry of Finance Raised $400M in its May 10th T-Bills Auction

Ministry of Finance Raised $400M in its May 10th T-Bills AuctionDuring the week ending on May 3rd, Broad Money (M3) rose by a weekly LBP 234B ($156M) to reach LBP 210,670B ($140B). On a yearly basis, M3 added 3.27% and rose by 1.24% since the start of the year.

M1 also rose by LBP 576B ($382M) to LBP 11,010B ($7B) over the week as currency in circulation grew by a weekly LBP 483B ($320.3M) and as demand deposits increased by LBP 93B ($62M).

Total deposits (excluding demand deposits) declined by LBP 341B ($226M) over the same week, as the $236M decline in deposits denominated in foreign currencies overshadowed the LBP 15B ($10M) increase in Term and savings deposits denominated in local currency (LBP).

In turn, the broad money dollarization rate declined from 61.98% by April 26th to 61.74% by May 6th, 2018. According to the Central Bank, the overnight interbank rate steadied at 4% in January 2018.

In the Treasury Bills Auction held on May 10th, 2018, the Ministry of Finance (MoF) raised LBP 603B ($400M), through the issuance of bills maturing in 6 months (6M) and notes maturing in 2 Years (2Y), and notes maturing in 10Y.

The highest demand was achieved on the 2Y notes, which accounted for 49.73% of total subscriptions, while the 10Y notes and 6M bills accounted for the remaining shares of 33.24% and 17.03%, respectively.

The discount rates 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. New subscriptions exceeded existing maturities by LBP 434B ($288M).

 

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