M3 Stood at $139B by the 17th of January

In the week ending January 17rd 2019, Broad Money (M3) fell by a weekly LBP 913B ($605M) to stand at LBP 210,028B ($139B), adding 0.51% year-on-year (y-o-y) and decreasing by 0.99% since the start of the year.

In details, M1 contracted by LBP 315B ($209M) over the same week, to settle at LBP 10,066B ($6.68B). The contraction is attributed to the LBP 123B ($81M) decline in demand deposits, and in the currency in circulation by LBP 192B ($127M).

Over the week, total deposits (excluding demand deposits) slumped by LBP 597.52B ($396M). This drop was driven by a decline in deposits denominated in foreign currencies and term and saving deposits denominated in LBP by $222M and LBP 263B ($174M), respectively.

As such, the rate of broad money dollarization marginally rose to 64.36% in the week ending Jan. 17th 2019, up from 64.24% in the week ending Jan. 10rd 2019. 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 January 17th 2019, the Ministry of Finance raised  LBP 169,060M ($112.14M) through the issuance of bills maturing in 6 months (6M), as well as notes maturing in 2 years (2Y) and 10 years (10Y). The highest demand was achieved on bills maturing in 10Y, grasping a share of 73.8% of total subscriptions. Meanwhile, the 6M and 2Y bills accounted for the remaining stakes of 8.3% and 17.9%, respectively. The discount rates on the 6M bills stood at 5.68%, while the coupon rate on the notes maturing in 2Y and 10Y stood at 7% and 10%, respectively.

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