Broad Money Supply M3 fell by $106M by November 29, 2018

During the week ending November 29, Broad Money (M3) fell by a weekly LBP 160B ($106M) to stand at LBP 210,645B ($139.73M). On a yearly basis, M3 added 1.74% and marginally increased by 1.23% since the start of the year.

In fact, M1 expanded by LBP404B ($268M) during the week of 22 to 29 November 2018, to stand at LBP 10,910B ($7.24M). This expansion was driven by the increase in demand deposits of LBP 466B ($309.12M) that overshadowed the decrease in currency in circulation of LBP 62B ($41.12M).

Total Deposits (excluding demand deposits) regressed by LBP 564B ($374M) over the week. This decline was a result of the drop in Term and saving deposits in LBP over the week ending November 29 by LBP 519B ($344M) accompanied with a drop in deposits denominated in foreign currencies by $30M.

As such, the rate of broad money dollarization grew from 62.04% to 63.33% this week. As for the overnight interbank rate, data from the central bank showed it steadied at 5% from May 2018 to October 2018.

In the Treasury Bills Auction held on December 6, the Ministry of Finance (MoF) raised LBP 169.07B ($112.15M), through the issuance of bills maturing in 6 months (6M) in addition to notes maturing in 3 years (3Y) and 7 years (7Y). The highest demand was achieved on the notes maturing in 3Y which constituted 69.82% of total subscriptions. while notes maturing in 7 years and the 6M bills accounted for the remaining stakes of 25.21% and 4.97% respectively.

The discount rate on the 6M bills stood 4.87%, while the coupon rate on the notes maturing in 3Y and 7Y stood at 6.50% and 7.08% respectively.

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