MANILA – The normalization of domestic liquidity after the Christmas holidays resulted in a drop in the interest rate of the Bangko Sentral ng Pilipinas’ (BSP) 28-day bills amid strong demand.
Data released by the central bank showed that the rate of the 28-day securities declined to 1.6607 percent from 1.6837 percent during the last auction of 2020 on December 22.
The BSP increased the offering to PHP100 billion from the previous auction’s PHP80 billion.
Bids totaled PHP185.85 billion and the auction committee made a full award.
The bid coverage ratio improved to 1.8585 from 1.5919 in the previous auction.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said “the stronger demand for the BSP bills reflects the ample liquidity in the financial system as cash holdings gradually return to normal following the December holidays.”
“Looking ahead, the BSP’s calibration of its monetary operations will continue to be guided by its assessment of market developments and liquidity conditions, as well as discussions with BSP counterparties,” Dakila said. (PNA)
