BSP term deposit facility rates slip anew

High domestic liquidity-driven demand for the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) resulted in the continued drop of its interest rates.

BSP data released on Wednesday showed that the weighted average interest rate of the seven-day TDF fell to 1.7232 percent and the14-day to 1.7487 percent.

These were at 1.7371 percent and 1.7760 percent for the one-week and two-week TDF, respectively, during the auction last January 5.

The BSP hiked the offer volume for both tenors this week to PHP200 billion for the seven-day and to PHP270 billion for the 14-day TDF. Both were fully awarded.

These were at PHP180 billion for the one-week TDF and PHP250 billion for the two-week TDF in the previous auction.

Total tenders for the seven-day facility amounted to PHP299.46 billion while it reached PHP435.809 billion for the other tenor.

The TDF is among the BSP’s monetary policy tools targeted to mop up excess liquidity from the economy.

In a statement, BSP Deputy Governor Francisco Dakila Jr. said results of the TDF auction this week “continue to support the view of normalization in liquidity conditions amid ample supply in the financial system.”

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

Source: Philippines News Agency

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