The Bangko Sentral ng Pilipinas’ (BSP) auction of 28-day BSP bills were still oversubscribed and fetched a lower rate last Friday.
“Market interest remained strong,” according to BSP Deputy Governor Francisco G. Dakila Jr.
The BSP offered P60 billion, same as last November 20, and received P112.20 billion in tenders, which was lower than last week’s P123.80 billion.
“The P60 billion offering for the 28-day BSP bills were awarded in full in (Friday’s) BSP securities auction,” said Dakila. The weighted average rate dropped to 1.7053 percent or 0.82 basis point lower from last week.
The range of accepted yields was at 1.700 percent to 1.725 percent which were narrower compared to last week’s 1.680 percent to 1.750 percent.
Dakila said the “sustained demand for the BSP bills is in line with the view that financial system liquidity remains ample.”
He reiterated that the BSP’s monetary operations “will continue to be guided by its assessment of market developments and liquidity conditions.”
The BSP securities was launched last September 18 after the BSP restored its authority to issue bills and bonds last year when its charter was amended.
“This is part of our initiative towards a more market-based monetary operations,” said BSP Governor Benjamin E. Diokno last Friday.
“The BSP securities will gradually expand the existing supply of risk- free financial instruments in the banking system and help in the development of the local bond market,” he added.
The securities facility is one of BSP’s primary liquidity mopping up tools and complements its term deposit facility which is offered every Wednesday.