MoF Raised $62.02M in the Treasury Bills’ Auction Held on October 15, 2020

BDL’s latest statistics on money supply revealed that Broad Money (M3) decreased by a weekly LBP 99B ($65M) in the week ending October 15, 2020 to stand at LBP 196,369B ($130.26M), leading to an annual decrease of 6.02% and a 3.02% decline since year-start (YTD).

In details, M1 expanded by a weekly LBP 437B ($290M) to settle at LBP 33,560B ($22.26B) by October 15, 2020. The uptick is mainly attributed to increase in Currency in circulation and in demand deposits by LBP 421B ($279.27M) and LBP 16B ($10.61M), respectively.

 In turn, total deposits (excluding Demand deposits) decreased by LBP 535.75B ($355M), owing to a weekly drops in Term and savings deposits and in Deposits denominated in foreign currencies by LBP 141B ($93.53M) and USD 262M, respectively.

As such, the rate of broad money dollarization declined, as it went from 68.41% in the week ending October 8, to 68.24% in the week ending October 15, 2020.

Analytically, the money supply M3 can be derived from combining the balance sheet of BDL with the balance sheet of banks to arrive at the monetary survey of the banking system. The resulting M3 would be equal to the sum of: net foreign assets (NFA), credit to the private sector (CPS), net credit to the public sector (NCPS), and other items net (OIN). Latest data show that in August 2020, M3 stood at $130.6B, less by 2.9% from year-start (YTD); NFA was $21.8B, less 18.2%; CPS was $37.9B, less by 19.3%; NCPS was $40.1B, less by 15.3%; and OIN was $30.8B, higher by 103.1%, and comprising mostly (in BDL’s terminology) other assets which include open market operations and seigniorage.

In its treasury bills (T-Bills) auction dating October 15, 2020, the Ministry of Finance (MoF) raised LBP 93.51B ($62.02M) through the issuance of T-Bills maturing in 3 months (3M) and 1 year (1Y) and notes maturing in 5 year (5Y). The highest demand was recorded on the 5Y notes which grasped 87.04% of total subscriptions, while the 3M and 1Y T-bills accounted for the remaining shares of 6.82% and 6.14%, respectively. In details, the coupon rate on the 5Y stood at 6%, while the yields on 3M and 1Y stood at 3.47% and 4.31% respectively.

 

Source: BDL; MoF

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