MANILA -- The rate of Bangko Sentral ng Pilipinas’ (BSP) seven-day term facility declined Wednesday amid high demand, as this was the only tenor offered on this shortened trading week.
Data released by the BSP showed that the rate of the seven-day Term Deposit Facility (TDF) went down to 4.7764 percent from 4.8943 percent during the auction last April 10.
BSP offered it for PHP10 billion but banks submitted a total of PHP30.15 billion worth of tenders. The auction committee made a full award.
With the large demand for the paper, its bid coverage ratio surged to 3.0150 from 1.4848 last week.
For the auction on April 24, the BSP will offer PHP10 billion worth of seven-day and 14-day TDF.
Monetary officials base the BSP’s TDF offering on their appreciation on demand for domestic liquidity in a certain period.
Historically, banks offer smaller bids ahead of long holidays, which monetary officials attribute to bankers' desire to remain more liquid to be able to cater to their clients’ requirements.
Market action is taking a long break this week, as the predominantly Catholic Philippines marks Holy Week, when Maundy Thursday and Good Friday are legal holidays. (PNA)
