MANILA – The rates of the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) declined on Wednesday, with both tenors attracting large bids.
Data released by the central bank show that the average rate of the seven-day facility, which is among the BSP’s excess liquidity mopping tools, slipped to 1.7071 percent and that of the 14-day facility to 1.6787 percent.
These were at 1.7413 percent for the one-week facility and 1.6899 percent for the two-week facility during the auction last February 2.
The BSP lowered the offer volume for the seven-day TDF to PHP190 billion from PHP220 billion last week, and the auction committee made a full award.
Total tenders reached PHP266.79 billion and this resulted in a bid coverage ratio of 1.4042.
On the other hand, offer volume for the 14-day TDF was hiked to PHP360 billion from last week’s PHP330 billion.
Bids amounted to PHP399.432 billion, resulting in a bid coverage ratio of 1.1095.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said accepted yields for the shorter-dated facility in this week’s auction “shifted slightly higher but narrowed to a range of 1.6175-1.7500 percent.”
Dakila said the same was posted by the two-week facility after it shifted higher but narrowed to a range of 1.6250 to 1.7000 percent.
He said results of this week’s TDF auction “reflect the continued normalization in the financial system amid ample liquidity.”
“Market participants appear to have a preference for the longer tenor,” he added. “Looking ahead, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments.” (PNA)
