Ministry of Finance Raised LP 679.70B Through Auction Held November 13th

During the week ending November 13, 2014, broad Money M3 fell by LP 41B ($27.49M), to reach LP 174,834B ($115.98B). M3 growth rate reached 6.32% year-on-year and 4.33% since year start. In contrast, M1 increased by LP 28B ($18.40M) due to the increase in money in circulation by LP 272B ($180.43M) and a decrease in demand deposits by LP 244B ($161.85M).

Total deposits (excluding demand deposits) fell by LP 69.18B ($45.89M), given the regression of deposits denominated in foreign currencies by $72M, while term and saving deposits in domestic currency rose by LP 39B. Over the above mentioned period, the broad money dollarization went down from 58.85% to 58.80%. According to the Central Bank, the overnight interbank rate stood at 2.75% at the end of September 2014.

In the TBs auction held on the 13th of November 2014, the Ministry of Finance raised LP 679.70B ($450.87M), through the issuance of bills maturing in 1Y, and 2Y and 3Y notes. The highest demand was achieved on the 3Y notes that took a share of 86.45%, while the 1Y bills and 2Y notes accounted for 2.41% and 11.13%, respectively. The 1Y bills yielded 5.08%, while the average coupon rate for the 2Y notes and 3Y notes stood at 5.84% and 6.50%, respectively. New subscriptions exceeded maturing T-bills by LP 315.39B ($209.21M).

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