BDL’s data on money supply revealed that Broad Money (M3) declined by LBP 879B ($583M) in the week ending March 19, 2020 to settle at LBP 206,301B ($129.21B), thereby recorded a yearly decrease of 7.75% and a decline of 3.81% year-to-date (YTD).
In details, money supply M1, inclusive of currency in circulation and demand deposits in LBP, decreased by LBP 49B ($32M) over the same week, reaching LBP 19,899B ($13.20B). The M1 downtick is attributed to the drop in demand deposits by LBP 260B ($172M) while currency in circulation rose by LBP 211B ($140M).
In their turn, Total deposits (excluding demand deposits) fell by LBP 830.47B ($551M). In fact, Term and saving deposits in LBP as well as Deposits denominated in foreign currencies dropped by LBP 295B ($196M) and $355M, respectively.
As such, the rate of broad money dollarization incrementally rose from 69.95% in the week ending March 12, 2020, to 69.99% in the week ending March 19, 2020.
In its treasury bills (T-Bills) auction dating February 27th 2020, the Ministry of Finance (MoF) raised LBP 176B ($117M) through the issuance of T-bills maturing in 6 months (6M) and notes maturing in 3 Years (3Y) and 7Y. The highest demand was recorded on the 7Y notes which grasped 61.74% of total subscriptions, while the 3Y notes and 6M bills accounted for the remaining shares of 34.11% and 3.95%, respectively. In details, the yields on the 6M bills stood at 5.85%, while the coupon rates on the 3Y notes and 7Y notes stood at 7.50% and 9%, respectively.