Broad Money Supply M3 Down by a Weekly $765B by May 09, 2019

Broad Money (M3) decreased by LBP 1,153B ($765B) in the week ending May 9, 2019, to stand at LBP 209,731B ($139B), declining by an annual 0.69% and by a yearly 1.13% since the start of the year.

In details, M1 contracted by LBP 310B ($206B) over the same week, to settle at LBP 10,238B ($7B). The decline is attributed to the LBP 388B ($257M) downtick in demand deposits, which outweighed the LBP 78B ($52M) increase in currency in circulation.

Over the week, total deposits (excluding demand deposits) declined by LBP 843B ($559M), driven by a LBP 296B ($196M) downtick in term and saving deposits denominated in LBP. In their turn, deposits denominated in foreign currencies also fell by $363M.

As such, the rate of broad money dollarization rose to 64.55% in the week ending May 09th 2019, up from 64.46% in the week ending May 2 2019. In its turn, the average weekly interbank rate increased to 8% in the week of May 9, 2019 compared to 6% the previous week.

In the treasury bills (T-Bills) auction held on April 25th 2019, the Ministry of Finance raised LBP 162.77B ($107.97M) through the issuance of bills maturing in 6months (6M) as well as notes maturing in 3 Years (3Y) and in 7 years (7Y). The highest demand was achieved on bills maturing in 3Y, grasping a share of 66.74% of total subscriptions. Meanwhile, the 6M and 7Y bills accounted for the remaining stakes of 2.54% and 30.72%, respectively. The discount rates on the 6M bills stood at 5.68% while the coupon rate on the notes maturing in 3Y and 7Y stood at 7.50% and 9%, respectively.

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