BSP bills fetch mixed rates
BSP bills fetch mixed rates – BusinessWorld Online
YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities ended mixed on Friday, with rates moving sideways and both tenors going oversubscribed.
The BSP bills fetched bids amounting to P176.724 billion on Friday, above the P140-billion offer and the P172.312 billion in tenders for the P130 billion auctioned off in the previous week. The central bank made a full P140-billion award of its offer.
Broken down, tenders for the 28-day BSP bills reached P58.659 billion, higher than the P50-billion offer and the P52.228 billion in bids for the same volume auctioned off the week prior. The central bank awarded P50 billion in one-month papers as planned.
Accepted yields ranged from 5.825% to 5.89%, narrower than the 5.809% to 5.9% band seen a week earlier. This caused the average rate of the one-month securities to inch up by 0.96 basis point (bp) to 5.857% from 5.8474% previously.
Meanwhile, bids for the 56-day bills amounted to P118.065 billion, above the P90-billion offering but lower than the P120.084 billion in tenders for the P80-billion offered by the central bank in the previous week. The BSP made a full P90-billion award.
Banks asked for yields ranging from 5.84% to 5.874%, narrower and lower than the 5.85% to 5.9% margin seen a week prior. With this, the average rate of the securities dropped by 1.87 bps to 5.8576% from 5.8763% logged in the previous auction.
The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide market rates.
The BSP bills were calibrated to not overlap with tenors of the Treasury bills and term deposits also being offered weekly.
Data from the central bank showed that around 50% of its market operations are done through the short-term BSP bills.
Short-term instruments offer more stability and predictability, the BSP has said. These are also considered high-quality liquid assets, giving banks more flexibility.
BSP securities can also be traded in the secondary market. — Luisa Maria Jacinta C. Jocson
