During the week ending January 8, 2015, broad Money M3 increased by LP 191B ($126.65M), to reach LP 177,489B ($117.74B) with a 5.97% year-on-year growth. In contrast, M1 retreated by LP 175B ($116.07M) due to the drop in demand deposits by LP 94B ($62.35M) and in money in circulation increased by LP 81B ($53.73M).
Total deposits (excluding demand deposits) rose by LP 365.90B ($242.72M), given the rise in deposits denominated in foreign currencies and term and saving deposits in domestic currency by $229M and LP 21B, respectively. Over the above mentioned period, the broad money dollarization rate went up from 58.67% the prior week to 58.80%. 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 15th of January 2015, the Ministry of Finance raised LP 303.78B ($201.52M), through the issuance of bills maturing in 3M and 1Y, and 3Y notes. The highest demand was achieved on the 5Y notes that took a share of 57.92%, while the 3M and 1Y bills accounted for 8.04% and 34.04%, respectively. The 3M and 1Y bills yielded 4.39% and 5.08%, respectively while the average coupon rate for the 5Y notes stood at 6.74%. Maturing T-bills exceeded new subscriptions by LP 244.65B ($162.29M).