M3 Expands by $823M to $140.7B by the Week Ending December 27th

During the week ending December 27, Broad Money (M3) increased by a weekly LBP 1,240B ($823M) to stand at LBP 212,132B ($140.72B). M3 added 1.64% and 1.94% on a yearly basis and since the start of the year, respectively.

In fact, M1 expanded by LBP 557B ($369.78M) during the week of 20 December to 27 December 2018, to stand at LBP 11,609B ($7.70M). This rise was driven by the increase in demand deposits of LBP 338B ($224.21M) and in currency in circulation of LBP 219B ($145.27B).

Total Deposits (excluding demand deposits) grew by LBP 683.24B ($453.07M) over the week. This hike was a result of a weekly increase of deposits denominated in foreign currencies by $674M. However, Term and saving deposits in LBP dropped by LBP 333B ($220.90M)

As such, the rate of broad money dollarization marginally increased from 63.88% in the week ending Dec 20 to 63.99% in the week ending Dec.27. As for the overnight interbank rate, data from the central bank showed it steadied at 5% from May 2018 to November 2018.

In the Treasury Bills Auction held on December 27, the Ministry of Finance (MoF) raised LBP 97.50B ($64.68M), through the issuance of bills maturing in 3 months (3M) in addition to notes maturing in 1 year (1Y) and 5 years (5Y). The highest demand was achieved on the notes maturing in 5Y which constituted 84.61% of total subscriptions while the notes and bills maturing in 1Y and 3M accounted for the remaining stakes of 8.86% and 6.53%, 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 stood at 6.74%.

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