Ministry of Finance (MoF) Raises LBP 258B through its December 1st Auction
During the week ending November 24, Broad Money M3 rose by a weekly LBP 217B ($144M) to reach LBP 194,787B ($129.21B). As such, M3 recorded a 5.59% annual increase and a 4.39% rise since the start of the year.
In contrast, M1 contracted by LBP 44B ($29M) over the same period to LBP 8,851B ($5.9B). This contraction may be attributed to the decrease of LBP 97M ($64M) in money in circulation and the rise of LBP 53B ($35M) in demand deposits.
Total deposits (excluding demand deposits) increased by LBP 261B ($173M) during the week, as deposits denominated in foreign currencies went up by $270M, while term and savings deposits denominated in local currency registered a decrease of LBP 146B.
Over the above mentioned period, the broad money dollarization rate rose from 58.43% on November 17th to 58.57% on November 24th. According to the Central Bank, the overnight interbank rate remained stable at 3% between August and September 2016.
In the Treasury Bills’ auction held on December 1, 2016, the Ministry of Finance (MoF) raised LBP 258B ($171M), through the issuance of bills maturing in 3M and 12M, and notes maturing in 60M. The highest demand was achieved on the 60M notes, which held a 49.02% share of total subscriptions, while the 3M and 12M bills accounted for the remaining shares of 23.13% and 27.85%, respectively. The discount rates on the 3M and 12M bills stood at 4.39% and 5.08% respectively, and the coupon rate on 60M notes recorded 6.74%. New subscriptions exceeded existing maturities by LBP 158B ($105M).
