WITHIN EXPECTATIONS. An ample liquidity situation in the domestic economy remains the reason for the decline in the central bank's term deposit facility (TDF). BSP Deputy Governor Francisco Dakila Jr. said bids volume are within their expectations. (Photo from BSP)
MANILA – The rates of the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) declined on Wednesday which a ranking central bank official attributed to strong demand given the ample domestic liquidity situation.
The average rate of the seven-day TDF, which is among the central bank's excess liquidity mopping tools, declined to 2.6838 percent from 2.6937 percent during the auction last July 6.
The rate of the 14-day facility also slipped to 2.7235 percent from last week’s 2.6937 percent.
The BSP hiked by PHP10 billion the offer volume for the one-week facility to PHP160 billion, and by PHP20 billion for the two-week facility. Both tenors were fully awarded.
Total bids for the seven-day facility reached PHP204.109 billion, while it amounted to PHP181.493 billion for the two-week facility.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said tenders during the auction this week are “well within the BSP’s range of expected volume.”
He said yields accepted in the one-week facility “shifted higher but narrowed to a range of 2.6400-2.7100 percent” while those of the two-week facility “remained generally unchanged at a range of 2.6250-2.7500 percent.”
“The results of the TDF auction show that liquidity in the financial system remains ample. Looking ahead, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments,” he added. (PNA)
