Broad Money Dropped by $76.74M during the Week ending August 6

During the week ending August 6 2015, broad Money M3 decreased by LP 116B ($76.74M), to reach LP 181,871B ($120.64B) with a 4.37% yearly growth and a 2.52% y-t-d uptick. Similarly, M1 decreased by LP 74B ($49.16M) due to the decrease in demand deposits by LP 301B ($199.67M) and the increase in money in circulation by LP 227B ($150.58M).

Total deposits (excluding demand deposits) went down by LP 41.58B ($27.58M), over the week, given the LP 89B growth in term and saving deposits which was outweighed by the $86M contraction in deposits denominated in foreign currencies. Over the above mentioned period, the broad money dollarization rate experienced a down-tick from 58.06% on July 30, to 58.02% on August 6. According to the Central Bank, the overnight interbank rate steadied at 2.75% at the end of June 2015.

In the TBs auction held on the 6th of August 2015, the Ministry of Finance raised LP 556B ($368.82M), through the issuance of bills and notes maturing in 6M, 2Y and 7Y. The highest demand was achieved on the 7Y notes, with a 49.46% share of total subscriptions, while the 2Y notes and 6M bills captured 37.59% and 12.95%, respectively. The 6M bills yielded 4.87%, while the coupon rates of the 2Y and 7Y notes stood at 5.84% and 7.08%, respectively.

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