M3 Recorded a 5.55% y-o-y Growth by May 14

During the 2-week period ending May 14th 2015, broad Money M3 surged by LP 526B ($349.11M), to reach LP 180,477B ($119.72B) with a 5.55% yearly growth and a 1.7% y-t-d uptick. In contrast, M1 went down by LP 307B ($203.65M) due to the decrease in demand deposits by LP 313B ($207.63M) which offset the LP 6B ($3.98M) increase in money in circulation.

Total deposits (excluding demand deposits) went up by LP 833.71B ($553.04M), over the two weeks, given the expansion of deposits denominated in foreign currencies by $276M and in term and saving deposits in domestic currency by LP 418B. Over the above mentioned period, the broad money dollarization rate experienced an up-tick from 58.27% to 58.33%. According to the Central Bank, the overnight interbank rate remained constant at 2.75% at the end of March 2015.

In the TBs auction held on the 21th of May 2015, the Ministry of Finance raised LP 78.95B ($52.37M), through the issuance of bills maturing in 3M and 1Y, and 5Y notes. The highest demand was achieved on the 5Y notes, with a 50.47% share of total subscriptions. Meanwhile,the 3M and 1Y bills captured respective proportions of 21.82% and 25.81%. In addition, the 3M and 1Y bills yielded 4.39% and 5.08%, respectively, while the coupon rate of the 5Y notes stood at 6.74%.

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