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TDF rates mixed on investors’ preference for longer tenor

Banks’ preference for a longer tenor term deposit facility (TDF) resulted in mixed results of the facility’s interest rates on Wednesday.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the average rate of the two-week TDF rose to 1.8118 percent while the rate of the one-week TDF slipped to 1.7464 percent.

During the auction last June 9, the average rate of the 14-day TDF was at 1.7950 percent while it was at 1.7582 percent for the seven-day facility.

The BSP increased the offering for the 14-day facility to PHP390 billion from last week’s PHP370 billion.

The auction committee made a full award after tenders reached PHP443.545 billion.

On the other hand, the offer volume for the seven-day TDF was reduced to PHP140 billion from last week’s PHP150 billion.

This tenor was also fully awarded after tenders amounted to PHP212.28 billion.

In a statement, BSP Deputy Governor Francisco Dakila Jr. said results of the TDF auction this week “continue to mirror market participants’ search for yield in the longer tenor as the financial system remains very liquid.”

“Moving forward, the BSP’s monetary operations will remain guided by its latest assessment on liquidity conditions and market developments,” he added.

Source: Philippines News Agency