MANILA – Search for yields continues to push the central bank’s 14-day term deposit facility (TDF) rate higher but the rate of the seven-day facility sustained its decline.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed that the average rate of the two-week facility, which is among the central bank’s tools to mop up excess liquidity in the system, rose to 1.7723 percent.
The weighted average accepted yield of the seven-day TDF slipped to 1.7521 percent, it said.
These were at 1.7745 for the 14-day facility and 1.7355 percent for the seven-day tenor during the auction last October 20.
The BSP hiked the offer volume by PHP10 billion each for both tenors in this week’s auction to PHP160 billion for the seven-day TDF and PHP320 billion for the 14-day facility. Both were oversubscribed and fully awarded.
Total tenders for the seven-day facility amounted to PHP176.65 billion while it reached PHP372.278 billion for the 14-day facility.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said yields accepted for the seven-day TDF this week widened to a range of 1.7000 to 2.0000 percent from last week’s 1.7000 to 1.7800 percent.
Dakila said the accepted yield for the 14-day TDF jumped but the range narrowed to 1.7300 to 1.8000 percent.
These results, he said, “reflect market participants’ search for yield in the longer tenor amid sustained stable market conditions, supported by ample liquidity in the financial system.”
“Moving forward, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” he added.(PNA)