Ministry of Finance Issued 3M and 6M Bills and 5Y Notes on the 23rd of October

During the two weeks ending October 16, 2014, broad Money M3 rose by LP 231B ($153.56M), to reach LP 175,148B ($116.18B). M3 growth rate reached 6.82% year-on-year and 4.52% since year start. In contrast, M1 declined by LP 336B ($223.07M) due to the decrease in money in circulation by LP 196B ($130.02M) and in demand deposits by LP 141B ($93.53M).

Total deposits (excluding demand deposits) grew by LP 567.77 ($376.63M), given the expansion of term and saving deposits in domestic currency by LP 187B, and of deposits denominated in foreign currencies by $253M. Over the above mentioned period, the broad money dollarization went up from 58.81% to 58.95%. According to the Central Bank, the overnight interbank rate stood at 2.75% at the end of August 2014.

In the TBs auction held on the 23rd of October 2014, the Ministry of Finance raised LP 183.66B ($121.83M), through the issuance of bills maturing in 3 months, 6 months and 5Y notes. The highest demand was achieved on the 5Y notes that took a share of 75.39%, while the 3-month and 6-month bills accounted for 10.08% and 14.53%, respectively. The 3-month and 6-month bills yielded 4.39% and 4.87% respectively. Meanwhile the average coupon rate for the 5Y notes stood at 6.74%. New subscriptions exceeded maturing T-bills by LP 33.34B ($22.12 M).

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