Broad Money M3 Climbed by $405M in by September 13th, 2018

During the week of Sept. 6th to 13th, Broad Money (M3) rose by a weekly LBP 611B ($405M) to stand at LBP 212,947B ($141B). As such, M3 rose by an annual 1.70% and by 2.33% since December 2017.

In details, M1 rose by LBP 5B ($4M) during the week ending Sept. 13th, to reach LBP 11,274B ($7B), owing to a LBP 171B ($113M) increase in demand deposits which outweighed the LBP 166B ($110M) decline in currency in circulation over the week.

Total deposits (excluding demand deposits) grew by LBP 605B ($401M) over the same period, owing it to a $484M uptick in deposits denominated in foreign currencies. Meanwhile, Term and saving deposits in LBP declined by LBP 125B ($83M) over the week.

Accordingly, the broad money dollarization rate rose from 62.34% in the week ending Sept. 6th, to 62.50% by the week ending Sept. 13th 2018. 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 Sept. 13, 2018, the Ministry of Finance (MoF) raised LBP 126B ($84M), through the issuance of bills maturing in 6 months (6M), and notes maturing in 3 years (3Y) and 7Y. The highest demand was achieved on the 3Y notes, which accounted for 39.78% of total subscriptions, while the 6M bills and 7Y notes accounted for the remaining shares of 20.5% and 39.73%, respectively. The discount rate on the 6M stood at 4.87%, while the coupon rates on the notes maturing in 3Y and 7Y stood at 6.5% and 7.08%, respectively.


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