M1 Expanded by LBP 531B Between March 12 and April 2

During the three week period starting March 12 to April 2 2015, broad Money M3 increased by LP 784B ($519.96M), to reach LP 177,868B ($117.99M) with a 5.00% year-on-year growth and 0.3% year-to-date increase. Furthermore, M1 rose by LP 531B ($352.40M) due to an increase in demand deposits and money in circulation by LP 380B ($252.07M) and LP 151B ($100.17M).

Total deposits (excluding demand deposits) went up by LP 252.59B ($167.56M), given the increase of deposits denominated in foreign currencies by $61M and in term and saving deposits in domestic currency by LP 161B. Over the above mentioned period, the broad money dollarization rate experienced a downtick from 58.30% to 58.10%. According to the Central Bank, the overnight interbank rate remained constant at 2.75% at the end of January 2015.

In the TBs auction held on the 9th of April 2015, the Ministry of Finance raised LP 147.28B ($97.70M), through the issuance of bills and notes maturing in 3M, 1Y and 5Y. The highest demand was achieved on the 10Y notes which grasped a share of 76.86% of total subscription, whilethe 1Y and 3M bills contributed to the remaining shares of 12.20% and 10.94%, respectively. Furthermore, the 3M and 1Y bills yielded 4.39% and 5.08% while the average coupon rate for the 5Y notes stood at 6.74%, respectively. Maturing T-bills exceeded New subscriptions by LP 45.50B ($30.18M).

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