Strong demand for the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) resulted in the rise of its interest rates on Wednesday.
Data released by the central bank showed that the weighted average rate of the seven-day facility, which is among the BSP’s tools used to mop up excess liquidity in the economy, rose to 1.7143 percent from 1.7121 percent during the auction last Sept. 1.
The rate of the 14-day TDF also jumped to 1.7517 percent from week-ago’s 1.7381 percent.
The BSP hiked the offer volume for the one-week facility by PHP10 billion to PHP160 billion but slashed the offer volume for the two-week facility to PHP400 billion from last week’s PHP420 billion.
Both tenors were oversubscribed and fully awarded.
Tenders for the seven-day TDF reached PHP191.356 billion, resulting in a bid coverage ratio of 1.1960.
Bids for the 14-day facility amounted to PHP422.712 billion.
Bid coverage ratio stood at 1.0568.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said bids submitted during the auction are “well within the BSP’s expected volume range.”
Dakila said this week’s “auction results show the continued preference of market participants toward the shorter tenor.”
“Nevertheless, market conditions remain normal amid sustained ample liquidity in the financial system. Looking ahead, the BSP’s monetary operations will continue to be based on its assessment of the latest liquidity conditions and market developments,” he added.
Source: Philippines News Agency
