REMAINED STRONG. The rate of the Bangko Sentral ng Pilipinas' (BSP) 28-day securities rises on Friday (July 15, 2022), which BSP Deputy Governor Francisco Dakila Jr. attributes to the surprise 75 basis points increase in the central bank's key rates on Thursday. He said demand for the debt paper remained strong despite the rise in the central bank's policy rates. (Photo from BSP)
MANILA – The rate of the Bangko Sentral ng Pilipinas’ (BSP) 28-day bills rose on Monday but the central bank said demand for the paper remained strong.
The average rate of the debt paper, which is among the BSP’s tools to mop up excess liquidity from the financial system, inched up to 3.3958 percent from 2.8635 percent during the auction last July 8.
The BSP kept the offer volume at PHP150 billion and bids reached PHP236.25 billion. The auction committee made a full award.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said yields accepted during the securities auction this week also “shifted higher and widened to a range of 2.8530-3.4900 percent.”
“The results of the auction reflect that BSP bill rates rose in response to the 75-bp rate hike yesterday,” he said.
On Thursday, the central bank’s policy-making Monetary Board (MB) decided an off-cycle rate hike on the BSP’s key rates in a bid to help address risks to inflation and buoy the inflation outlook as price pressures mount given the ongoing monetary policy normalization around the world.
The rate increase, the biggest one-time adjustment to date, brought the BSP’s overnight reverse repurchase (RRP) rate to 3.25 percent, the overnight deposit rate to 2.75 percent, and the overnight repurchase rate to 3.75 percent.
Amidst the rate uptick, Dakila said “liquidity in the financial system remains ample and continues to support normal market conditions.”
“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)
