T-bill rates end mixed on Fed normalization, inflation factor

The looming cuts in the Federal Reserve’s asset purchases and hikes in interest rates partly resulted in the mixed movements of Treasury bills (T-bills) rates on Monday.

The average rate of the 91-day Treasury bill (T-bill) rose to 1.095 percent but it was flat for the 182-day at 1.391 percent and sideways for the 364-day at 1.587 percent.

These were at 1.085 percent, 1.391 percent, and 1.584 percent for the three and six months and one-year papers during the auction last October 4.

The Bureau of the Treasury (BTr) offered all tenors for PHP5 billion and the auction committee made full awards across-the-board.

All tenors also posted oversubscriptions.

Tenders for the three-month debt paper amounted to PHP11.37 billion; the six-month paper, PHP18.364 billion; and the one-year paper, PHP16.86 billion.

In a Viber message to journalists, National Treasurer Rosalia de Leon said the rise in both the T-bills and T-bonds’ interest rates for some weeks now is expected “given expectations on Fed unwind of accommodative monetary stance starting with bond purchases and eventual rate liftoff.”

“Locally, (the) market expects high inflation to be temporary starting slowing inflation in September,” she added.

Inflation slowed to 4.8 percent last September after hitting 4.9 percent in the previous month, its highest since January 2019.

Monetary authorities expect rate of price increases to remain elevated in the coming months before decelerating to within the 2 percent to 4-percent target band of the government by the end of the year.

To date, average inflation stood at 4.5 percent and monetary officials expect this year’s average to be at 4.4 percent.

Source: Philippines News Agency

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