Broad Money Supply M3 Down weekly by $88M by December 13, 2018

During the week ending December 13, Broad Money (M3) declined by a weekly LBP 132B ($88M) to stand at LBP 210,709B ($139.77B). On a yearly basis, M3 added 1.40% and marginally increased by 1.26% since the start of the year

In fact, M1 contracted by LBP 92B ($61M) during the week of 06 December to 13 December 2018, to stand at LBP 10,933 ($7.25M). This decrease was driven by the decline in currency in circulation of LBP 120B ($79.60M) that outpaced a rise in demand deposits of LBP 28B ($18.57M).

Total Deposits (excluding demand deposits) declined by LBP 40.50B ($26.87M) over the week. This fall was a result of a weekly drop in Term and saving deposits in LBP by LBP 369B ($245M). However, deposits denominated in foreign currencies rose by $218M.

As such, the rate of broad money dollarization recorded an uptick from 63.60% to 63.80% 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 13, the Ministry of Finance (MoF) raised LBP 1,308B ($868M), through the issuance of bills maturing in 3 months (3M) and 1 Year (1Y) in addition to notes maturing in 5 years (5Y) and 15 years (15Y). The highest demand was achieved on the notes maturing in 15Y which constituted 91.90% of total subscriptions while notes maturing in 5years, 1 year as well as the 3M bills accounted for the remaining stakes of 1.22%, 6.42% and 0.46% respectively.

The discount rate on the 3M and 1Y bills stood 4.39% and 5.08%, while the coupon rates on the notes maturing in 5Y and 15Y stood at 6.74% and 10.50% respectively. New subscriptions exceeded existing maturities by LBP 1,179B ($782M).

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