Market prefers short-term TDF: BSP

MANILA: The Bangko Sentral ng Pilipinas (BSP) said the market has preferred the 7-day term deposit facility (TDF) than the 14-day TDF during Wednesday’s auction.

 

The central bank awarded the PHP200-billion 7-day TDF in full after fetching bids higher than the offer amounting to PHP206.8 billion.

 

The average yield for the shorter tenor was higher this week at 6.2860 percent from the last auction’s rate at 6.2466 percent.

 

On the other hand, tenders for the 14-day paper fell short of the PHP160 billion offer on this day’s bidding.

 

Bids for the longer tenor TDF only amounted to PHP155.79 billion. BSP accepted the entire bid, with the yield also higher than last week.

 

The average rate for the 14-day TDF stood at 6.3803 percent from the previous action’s yield of 6.3323 percent.

 

“The result of the TDF auction reflected the pass-through of the 50-basis point rate hike by the BSP last 15 December. An inclination for the shorter tenor was also observed amid preference for cash over the upcoming holidays,” BSP deputy governor Francisco Dakila Jr. said in a statement.

 

Dakila added that the central bank’s operations will remain guided by its assessment of the latest liquidity conditions and developments in the market.

 

Source: Philippines News Agency

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