T-bill rates up ahead of Fed meeting

General

The rates of Treasury bills (T-bills) rose on Monday, resulting in the partial award of the one-year debt paper.

The average rate of the three-month paper rose to 1.272 percent, the six-month paper to 1.635 percent, and the one-year paper to 1.933 percent.

These were at 1.140 percent, 1.558 percent, and 1.901 percent for the 91-day, 182-day, and 364-day debt securities during the auction last April 25.

The Bureau of the Treasury (BTr) offered all tenors for PHP5 billion each. Both the three- and six-month papers were fully awarded but the auction committee only awarded PHP2.613 billion for the one-year tenor.

Total bids for the 91-day paper reached PHP10.536 billion, while it amounted to PHP8.582 billion for the 182-day and PHP4.613 billion for the 364-day.

“Bids (were) higher as (the) market immersed in both Fed (US’ Federal Reserve) and BSP(‘s) (Bangko Sentral ng Pilipinas) aggressive tightening rhetoric,” National Treasurer Rosalia de Leon told journalists in a Viber message on Monday.

Both central banks are expected to hike their respective policy rates, with the Fed expected to increase key rates by 50 basis points during the May 3-4 meeting of the Federal Open Market Committee (FOMC) given the acceleration of inflation rates in their respective countries.

De Leon said Fed Chair Jerome Powell is “open to frontloading rate hikes combined with balance sheet runoff to cool down overheating prices.”

“Onshore, inflation for April (is) likewise seen to settle higher at 4.6 percent,” she added.

Domestic inflation last March rose to 4 percent from 3 percent in the previous two months

Source: Philippines News Agency

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