RATE RISES. The rate of the Bangko Sentral ng Pilipinas' (BSP) 28-day securities rises anew on Friday (June 10, 2022), which BSP Deputy Governor Francisco Dakila Jr. (in photo) traced to investors' expectation for more central bank rate hikes. Both the BSP and the Federal Reserve are expected to announce another rate increase this month. (Photo from BSP)
MANILA – Expectations for more hikes in central banks’ key policy rates again resulted in the hike in the Bangko Sentral ng Pilipinas’ (BSP) 28-day securities.
BSP data show that average rate of the debt paper increased to 2.6566 percent during the auction on Friday from 2.5351 percent last June 3.
BSP lowered the offer volume to PHP150 billion from week-ago’s PHP160 billion.
Total tenders remain below offer at PHP138.6 billion, which the auction committee fully accepted. Bid coverage ratio stood at 0.9240.
BSP Deputy Governor Francisco Dakila Jr., in a statement, said yields accepted during the auction this week “shifted higher to a range of 2.5000-2.9000 percent.”
“The results of the BSP bill auction may be due in part to eligible market participants’ expectations of a rate hike in a few weeks,” he said.
The BSP’s policy-making Monetary Board (MB) will have its fourth rate-setting meet for the year on June 23, and BSP Governor and MB Chair Benjamin Diokno have hinted another rate increase following the 25 basis points hike last May, which is the first since December 2018.
Relatively, the Federal Open Market Committee (FOMC) will have another meeting on June 14-15 and it is widely expected to deliver aggressive rate hikes after the total of 75 basis points increase last March and May.
Monetary authorities from the BSP and the Federal Reserve attribute the rate hikes to the need to help tame inflation rate. (PNA)
