M3 Retreated to $129B in the week ending March 26th 2020

According to BDL’s data, Broad Money (M3) fell by a weekly LBP 217B ($144M) in the week ending March 26th to LBP 194,563B ($129B), thereby recording a yearly decline of 7.91% and a decrease of 3.91% since year-start (YTD).

A breakdown of the data revealed that money supply M1, inclusive of currency in circulation and demand deposits in LBP, widened by a weekly LBP 308B ($204M) to reach LBP 20,207B ($13B) over the same period. The M1 uptick is mainly attributed to the respective increases of LBP288B ($191M) and LBP 20B ($13M) recorded in Demand deposits and in Currency in circulation by March 26th.

In their turn, Total deposits (excluding demand deposits) contracted by LBP 525B ($348M). In fact, both the Term and saving deposits in LBP and the Deposits denominated in foreign currencies fell by LBP 393B ($261M) and $87M, respectively.

Accordingly, the rate of broad money dollarization barely changed from 69.99% on March 19th to 70.00% in the week ending March 26th 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.

Source: BDL; MoF

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