MANILA – High domestic liquidity situation continues to drive demand for the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) but rates again posted mixed results on Wednesday.
Data released by the central bank showed that the average rate of the seven-day facility slipped further to 1.7202 percent but the rate of the 14-day TDF increased to 1.7714 percent.
These were at 1.7230 percent for the seven-day TDF and 1.7546 percent for the 14-day facility during the auction last May 19.
The BSP kept the offer volume for the one-week facility at PHP150 billion and tenders reached PHP159.225 billion.
This resulted in a bid coverage ratio of 1.0615, lower than the 1.1187 last week when the same volume was met with bids amounting to PHP167.799 billion.
Bids for the two-week facility reached PHP365.076 billion, higher than the PHP360-billion offer.
The bid coverage ratio stood at 1.0141, lower than last week’s 1.1337 last week when the PHP360-billion offer was met with tenders amounting to PHP408.124 billion.
“The results of the TDF auction show sustained market participants’ interest in the BSP’s deposit facilities, particularly on the shorter tenor,” BSP Deputy Governor Francisco Dakila Jr. said in a statement.
He said liquidity conditions remain normal amid ample financial system liquidity.
“Looking ahead, the BSP will continue to be guided by its assessment of the latest liquidity conditions and market developments in its monetary operations,“ he added. (PNA)
