BSP bills oversubscribed by 1.42x

The central bank’s auction of 28-day securities facility fetched a higher yield and bids amounting to P141.95 billion against an offer size of P100 billion.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr. said on Friday, March 18, that BSP bills’ auction continued to reflect the gradual normalization of market conditions following the Retail Treasury Bond issuance amid ongoing external developments.

BSP Deputy Governor Francisco G. Dakila Jr.

“Nevertheless, the BSP bill rate remains low, supported by ample liquidity in the domestic financial system. Going forward, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” said Dakila.

The 28-day securities continue to enjoy strong demand from market participants. On Friday, total bids of P141.95 billion was 1.42x the volume offering.

Meantime, the average interest rate rose to 2.0452 percent. Dakila noted that the weighted average interest rate continued to increase, it was up by 2.658 basis points from the previous week’s rate. “The yields accepted likewise shifted higher but narrowed to a range of 1.9500-2.1000 percent,” he added.

The central bank first offered the BSP securities facility in September 2020 with only a P20-billion offer. Its highest volume so far is P130 billion. The facility is one of BSP’s key liquidity-mopping up tools to manage inflation.

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