M1 and M3 dropped during the Week Ending September 25
During the week ending September 25, 2014, broad Money M3 dropped by LP 52B ($34.49M), to reach LP 175,228B ($116.24B). M3 growth rate reached 7.17% year-on-year and 4.57% since year start. Likewise, M1 regressed by LP 109B ($72.31M) due to the decrease in money in circulation by LP 104B ($68.99M) and in demand deposits by LP 5B ($3.32M).
Total deposits (excluding demand deposits) grew by LP 56.76B ($37.65M), given the rise in term and saving deposits in domestic currency by LP 164B, while deposits denominated in foreign currencies lessened by $71M. Over the above mentioned period, the broad money dollarization went down from 59.19% to 59.14%. According to the Central Bank, the overnight interbank rate dropped from 9.00% end of June 2014 to 2.75% end of July.
In the TBs auction held on the 25th of September 2014, the Ministry of Finance raised LP 241.94B ($160.49M), through the issuance of bills maturing in 3M and 6M, and 5Y notes. The highest demand was achieved on the 5Y notes that took a share of 86.01%, while the 3M and 6M bills accounted for 4.77% and 9.22% respectively. The 3M and 6M bills yielded 4.39% and 4.87%, respectively. Meanwhile the average coupon rate for the 5Y notes stood at 6.74%. New subscriptions exceeded Maturing T-bills by LP 138.27B ($91.72 M).
