Ministry of Finance Raised LP 552.07B in December 11 Auction

During the two weeks ending December 4, 2014, broad Money M3 increased by LP 245B ($162.73M), to reach LP 175,594B ($116.48B). M3 growth rate reached 6.30% year-on-year and 4.79% since year start. Similarly, M1 gained LP 467B ($309.68M) due to the rise in money in circulation by LP 259B ($171.81M) and demand deposits by LP 208B ($137.98M), respectively.

Total deposits (excluding demand deposits) decreased by LP 221.53B ($146.95M), given the rise in deposits denominated in foreign currencies and term and saving deposits in domestic currency by $143M and LP 8B, respectively. Over the above mentioned period, the broad money dollarization rate edged down from 58.90% to 58.70%. According to the Central Bank, the overnight interbank rate stood at 2.75% at the end of October 2014.

In the TBs auction held on the 11th of December 2014, the Ministry of Finance raised LP 552.07B ($346.31M), 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 83.33%, while the 1Y bills and 2Y notes accounted for 1.90% and 14.77%, respectively. The 1Y bills yielded 5.08%, while the average coupon rate for 2Y and 3Y notes stood at 5.84% and 6.50%, respectively. New subscriptions exceeded Maturing T-bills by LP 124.57B ($82.63M).

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