Ministry of Finance (MoF) Raises LBP 304B through its December 8th Auction
During the week ending December 8, Broad Money M3 rose by a weekly LBP 317B ($211M) to reach LBP 195,935B ($130B). As such, M3 recorded a 5.88% annual increase and a 5% rise since the start of the year.
In contrast, M1 contracted by LBP 249B ($166M) over the same period to LBP 9,198B ($6.10B). This contraction may be attributed to the rise of LBP 85B ($56M) in money in circulation and the decrease of LBP 334B ($222M) in demand deposits.
Total deposits (excluding demand deposits) increased by LBP 566B ($375M) during the week, as deposits denominated in foreign currencies went up by $388M, while term and savings deposits denominated in local currency registered a decrease of LBP 19B.
Over the above mentioned period, the broad money dollarization rate rose from 58.38% on December 1st to 58.58% on December 8th. According to the Central Bank, the overnight interbank rate remained stable at 3% between September and October 2016.
In the Treasury Bills auction held on December 8, 2016, the Ministry of Finance (MoF) raised LBP 304B ($202M), through the issuance of bills maturing in 6M and notes maturing in 36M and 84M. The highest demand was achieved on the 36M notes, which held a 59.35% share of total subscriptions, while the 6M bills and 84M notes accounted for the remaining shares of 4.30% and 36.35%, respectively. The discount rates on the 6M bills stood at 4.87%, while the coupon rate on the 36M and 84M notes registered 6.50% and 7.08%, respectively. New subscriptions exceeded existing maturities by LBP 30B ($20M).
