TDF oversubscribed but yields are down

Published January 29, 2020, 12:00 AM

by manilabulletin_admin

By LEE C. CHIPONGIAN

The central bank’s term deposit facility (TDF) fetched lower rates this week but tenders still exceeded offer of ₱200 billion.

Bids reached ₱262.97 billion, lower than the previous week’s almost ₱300 billion tenders, based on data from the Bangko Sentral ng Pilipinas (BSP).

During Wednesday’s auction, the 7-day TDF is still offered at ₱80 billion, same as January 22. Tenders amounted to ₱105.23 billion, lower than ₱134.77 billion last week. Yields dropped to 4.0233 percent from 4.0301 percent.

The 14-day TDF at ₱60 billion, attracted ₱94.08 billion bids while the average rate fell to 4.0397 percent from 4.0530 percent. The bids were more than the previous ₱75.56 billion.

In the meantime, the 28-day tenor, also offered at ₱60 billion, had bids of ₱63.66 billion which was lower than last week’s ₱87.32 billion. The average rate dipped to 4.0741 percent from 4.0917 percent.

The BSP offered ₱200 billion in the TDF auction for the first time on January 22, it was the highest volume since the TDF was introduced in 2016.
The BSP’s move to reduce the reserve requirement ratio by 400 basis points has released ₱400 billion into the financial system.

 
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