Money supply M3 at $140B by January 3rd 2019, Down by a Weekly $654M

In the week ending January 3rd 2019, Broad Money (M3) fell by a weekly LBP 986B ($654M) to stand at LBP 211,146B ($140B), adding 1.04% year-on-year (y-o-y).

In details, M1 narrowed by LBP 923B ($612M) over the same week, to settle at LBP 10,686B ($7B). The contraction is attributed to the LBP 959B ($636M) decline in demand deposits, while the currency in circulation ticked up by LBP 36B ($24M).

Over the week, total deposits (excluding demand deposits) decreased by LBP 63B ($42M), owing it to a weekly $281M drop recorded in deposits denominated in foreign currencies. However, term and saving deposits denominated in LBP added LBP 361B ($239M).

As such, the rate of broad money dollarization marginally rose to 64.09% in the week ending Jan. 3rd 2019, up from 63.98% in the week ending Dec 27th 2018. In its turn, the overnight interbank rate data has been steady at 5% from May 2018 to November 2018, as per to the central bank’s latest available data.

In the treasury bills (T-Bills) auction held on December 27th 2018, the Ministry of Finance raised LBP 97.50B ($64.68M) through the issuance of bills maturing in 3 months (3M) and 1 year (1Y), as well as notes maturing in 5 years (5Y). The highest demand was achieved on the notes maturing in 5Y, grasping as share of 84.61% of total subscriptions. Meanwhile, the 1Y and 3M bills accounted for the remaining stakes of 8.86% and 6.53%, 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%.

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