Yields of short-dated IOUs (treasury bills) continued to rise at Monday’s (March 15) Bureau of Treasury auction, Interest rate of three-month Treasury bills (T-bills) jumped to 1.232 percent from last week’s 1.139 percent, while six-months notes increased from 1.316 percent to P1.527 percent.
The one-year papers also went up to 1.990 percent from 1.852 percent in the previous week.
National Treasurer Rosalia de Leon explained the spike in interest rates was driven by market expectations that inflation will remain elevated in the second-quarter.
De Leon also said that domestic rates are trending up as US Treasuries adjust upwards with good prospects of strong rebound with stimulus package. “Supply side constraints also push rates as we also see oil prices increasing,” she added. The Bureau of the Treasury auction was oversubscribed after attracting P42.4 billion in offers, or more than double the P20 billion offer.