Broad Money Declined Weekly by LP 229B by June 11

During the week period ending June 11, 2015, broad Money M3 decreased by LP 229B ($152.07M), to reach LP 181,191B ($120.19B) with a 5.16% yearly growth and a 2.14% y-t-d uptick. Similarly, M1 went down by LP 90B ($59.79M) due to the decrease in currency in circulation by LP 88B ($58.37M) and the decline in demand deposits by LP 3B ($1.99M).

Total deposits (excluding demand deposits) fell by LP 139.11B ($92.28M), over the week, given the contraction of deposits denominated in foreign currencies by $208M while term and the increase in saving deposits by LP 174B. Over the above mentioned period, the broad money dollarization rate experienced a down-tick from 58.28% on June 4, to 58.18% on June 11. According to the Central Bank, the overnight interbank rate remained at 3.00% at the end of April 2015.

In the TBs auction held on the 18th of June 2015, the Ministry of Finance raised LP 177.050B ($117.45M), through the issuance of bills and notes maturing in 3M, 1Y and 5Y. The highest demand was achieved on the 5Y notes, with a 70.45% share of total subscriptions, while the 1Y and 3M bills captured the remaining 11.05% and 18.50%. The 3M and 1Y bills yielded 4.39% and 5.08%, respectively, while the coupon rate of the 5Y notes stood at 6.74%. New subscriptions exceeded maturing bills by LP 58.13B ($38.56M).

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