The Bangko Sentral ng Pilipinas’ (BSP) 28-day securities was oversubscribed by 1.59 times during its Friday auction, its last for 2020.
“The BSP offered and awarded in full P80 billion worth of 28-day bills in the last BSP Securities auction for the year amid increased demand for liquidity during the holidays in the coming weeks,” said BSP Deputy Governor Francisco G. Dakila Jr.
He also noted that because of strong demand, the weighted average rate continued to decline 0.838 basis point (bp) to 1.6837 percent on Friday. This week’s range of accepted yields were lower and still narrow at 1.670 percent to 1.690 percent.
BSP bills are risk-free assets and can be traded. The BSP received total tenders of P127.35 billion, 1.59x the offered volume of P80 billion. The bids were however lower compared to last week’s P141.25 billion.
Dakila said there is sustained strong market interest which reflects the excess liquidity in the financial system.
The BSP first offered the BSP bills on September 18. The securities facility is considered one of the BSP’s more effective liquidity management tool to bring short-term market rates closer to the policy rate.