Short-term yields drop ahead of Fed meet

Philippine benchmark interest rates for short-term loans dipped ahead of the US Federal Reserve’s policy meeting next week.

At Monday's auction of Treasury bills on Jan. 23, the bellwether 91-day T-bill rate declined to 4.211 percent from 4.250 percent previously. It is also lower than the secondary market rate of 4.312 percent.

The Bureau of the Treasury sold the P5 billion worth of three-month debt papers on offer. Investors however were asking for P22.36 billion more of the government security or IOU.

Yield on the 182-day T-bill also fell to 4.912 percent from the previous 4.967 percent as investors were willing to buy P19.08 billion of the six-month IOUs. The government accepted P5 billion as planned.

The six-month paper also settled slightly lower than the secondary market rate of 4.998 percent.

Moreover, interest rates on the 365-day T-bill went down to 5.428 percent from the previous 5.338 percent with total tenders for the one-year paper amounting to P20.573 billion, of which the government accepted P5 billion as planned.

The rate was below the 5.453 percent fetched in the secondary market.

The US central bank will hold its first policy meeting for this year from Jan. 31 to Feb. 1.