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New increases in TDF rates are reported ahead of inflation.

Although there was a clear demand for shorter-term TDFs during the auction on Wednesday, rates for both the seven-day and 14-day facilities increased as investors waited for important economic reports.

According to data from the Bangko Sentral ng Pilipinas (BSP), the average rate of the shorter-dated TDF increased from 3.3839 percent last week to 3.5089 percent this week.

During the auction last July 27, the average rate for the 14-day facility also climbed, rising to 3.5723 percent from 3.4900 percent.

With a complete award from the auction committee, the BSP increased the offer volume for the one-week facility by PHP20 billion to PHP170 billion. The total amount of bids was PHP218.96 billion.

The offer volume for the two-week facility, on the other hand, was left at PHP160 billion, and it was likewise fully awarded. The highest bid was PHP171.98 billion.

Results of this week’s TDF auction “reflect current market conditions with a preference for shorter tenors while market participants wait for critical data updates, such as inflation and GDP (gross domestic product),” according to a statement from BSP Deputy Governor Francisco Dakila Jr.

He continued, “For its part, the BSP’s monetary operations will continue to be guided by its assessment of the most recent market developments and liquidity conditions.”

On Friday, the Philippine Statistics Authority is set to release the inflation rate for July 2022, and on August 9, the GDP growth rate for the second quarter of 2022.

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