Broad Money M3 Up by $527M by August 30, 2018

During the week ending on August 30, Broad Money (M3) added a weekly LBP 795B ($527M) to stand at LBP 212,443B ($141B). M3 rose by an annual 1.46% and by 2.09% since December 2017.

In details, M1 rose by a weekly LBP 217B ($144M) to reach LBP 11,185B ($7B) by August 30, owing to a LBP 339B ($225M) increase in demand deposits and a LBP 122B ($81M) downtick in currency in circulation over the week.

Total deposits (excluding demand deposits) rose by LBP 578B ($383M) over the same period. This came on the back of a $433M growth in deposits denominated in foreign currencies, which outweighed the LBP 75B ($50M) decrease in Term and saving deposits in LBP over the week.

In turn, the broad money dollarization rate rose from 62.21% in the week ending in August 23, to 62.29% by the week ending August 30. According to the Central Bank, the overnight interbank rate was maintained at 5% from June 2018 to July 2018.

In the Treasury Bills Auction held on August 23, 2018, the Ministry of Finance (MoF) raised LBP 101.95B ($68M), through the issuance of bills maturing in 3 months (3M) and 1 year (1Y), in addition to notes maturing in 5Y. The highest demand was achieved on the 5Y notes, which accounted for 49.43% of total subscriptions, while the 3M and 1Y bills accounted for the remaining shares of 24.83% and 25.74%, respectively. The discount rates 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%. New subscriptions exceeded existing maturities by LBP 10B ($6.6M).


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