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BSP term deposit facility rates decline

Strong demand was registered during the term deposit facility (TDF) auction by the Bangko Sentral ng Pilipinas (BSP) yesterday, resulting in the decline of the facility’s interest rates. 

Data released by the central bank showed that the interest rate of the seven-day TDF slipped to 1.9325 percent and the 14-day’s to 1.9806 percent. 

These were at 1.9467 percent and 2.0374 percent for the one-week and two-week tenors during the auction last March 23.

Both tenors were fully awarded as both were oversubscribed. 

BSP hiked the offer volume for the one-week TDF to P160 billion from P150 billion last week and total tenders reached P211.867 billion. The bid coverage ratio stood at 1.3242. 

Offer volume for the 14-day facility increased to P230 billion from P220 billion last week. 

Total bids amounted to P326.942 billion. The bid coverage ratio stood at 1.4215. 

In a statement, BSP Deputy Governor Francisco Dakila Jr. said TDF interest rates declined anew this week but “yields accepted in both tenors shifted higher but narrowed to a range of 1.8500-1.9600 percent for the 7-day TDF and 1.8900-2.0000 for the 14-day TDF.” 

Dakila said the results of this week’s TDF auction “remain in line with the view that liquidity conditions have normalized amid market expectations of further rate hikes by the US Federal Reserve.”  

He said “domestic liquidity remains ample.” 

“Moving forward, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments,” he added.*PNA

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May 2022
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