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In spite of abundant liquidity, BSP’s term deposit facility rates decrease.

Due to robust demand and plenty of domestic liquidity, the rates of the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) decreased on Wednesday, according to a senior central bank official.

One of the measures used by the central bank to remove excess liquidity is the seven-day TDF, whose average rate dropped from 2.6937 percent to 2.6838 percent during the auction on July 6 of last year.

Additionally, the rate for the 14-day facility decreased from 2.6937 percent last week to 2.7235 percent.

The BSP increased the offer volume for the one-week facility by PHP10 billion to PHP160 billion and for the two-week facility by PHP20 billion. Full awards were given to both tenors.

Total bids for the seven-day facility came to PHP204.109 billion, while those for the two-week facility came to PHP181.493 billion.

BSP Deputy Governor Francisco Dakila Jr. said in a statement that the tenders during this week’s auction are “well within the BSP’s range of projected volume.”

The one-week facility’s yields “moved upward but narrowed to a range of 2.6400-2.7100 percent,” according to him, while the two-week facility’s yields “remain basically steady at a range of 2.6250-2.7500 percent.”

“The TDF auction results demonstrate that there is still enough liquidity in the banking sector. In the future, the BSP’s monetary operations will continue to be determined by its evaluation of the most recent market and liquidity developments,” he added.

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