MANILA – The Bangko Sentral ng Pilipinas (BSP) reduced the offer volume for the term deposit facility (TDF) on Wednesday as demand remained high, but the facility’s interest rates increased.
Data released by the central bank showed that the average rate of the seven-day facility jumped to 1.9603 percent and the 14-days to 2.0905.
During the TDF auction last March 9, the average rate of the one-week facility was 1.9525 percent and the two-week facility at 2.0615 percent.
Offer volume for the one-week facility was reduced to PHP150 billion from PHP160 billion in last week’s auction and the offer volume for the 14-day TDF was cut to PHP230 billion from PHP250 billion previously. Both tenors were fully awarded.
Total tenders for the one-week facility amounted to PHP185.754 billion, resulting in a bid coverage ratio of 1.2384.
The bid coverage ratio of the two-week TDF stood at 1.1336 after tenders reached PHP260.726 billion.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said yields accepted for both tenors in this week’s auction “shifted higher but narrowed to a range of 1.7000-2.1000 percent in the seven-day TDF and 1.8000-2.2100 percent in the 14-day TDF.”
Dakila said the outcome of this week’s TDF auction shows “the normalization of market conditions following the issuance of retail treasury bonds amid investor concerns over global developments.”
“Nevertheless, TDF rates remain low, supported by ample liquidity in the financial system. Looking ahead, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments,” he added. (PNA)
