BSP bills attract P160 B

The central bank’s auction of 28-day securities on Friday, Sept. 9, received P160.05 billion bids against a reduced offer of P90 billion.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr. said there is “strong interest” for the BSP bills despite that the volume is lower compared to last week’s P100 billion. The P160.05 billion tenders is higher compared to Sept. 2’s P141.45 billion.

“The results of the BSP bill auction point to the gradual return to normal liquidity conditions in the short-term market following the settlement of the Retail Treasury Bonds,” said Dakila.

The lone tenor also attracted lower yield this week of 4.0518 percent versus 4.0596 percent previously. The bid coverage ratio increased to 1.7783 from 1.4145, indicating more demand.

“There was strong interest from eligible market participants as total tenders reached P160.05 billion which is equivalent to a bid-cover ratio of about 1.78x the offering,” noted Dakila.

“The weighted average interest rate for the BSP bill declined slightly by 0.7783 bp (basis point) to 4.0518 percent. The yields accepted shifted higher but narrowed to a range of 3.9200- 4.0990 percent,” he added.

The BSP securities facility was launched in September 2020 to help the BSP manage inflation by mopping up excess money supply. It only has one tenor, the 28-day, which was formerly the 28-day term deposit facility.