BSP auction of term deposits oversubscribed

posted March 20, 2019 at 08:55 pm
by  Julito G. Rada
The Bangko Sentral ng Pilipinas said it sold P50 billion worth of term deposits under its interest rate corridor system Wednesday amid strong demand from investors.

It said the auction was oversubscribed by more than P15 billion amid the good appetite for seven-day, 14-day and 28-day instruments.

Data showed that total tenders reached P65.54 billion, higher than the weekly volume of P50 billion.

The seven-day P20-billion deposits lured bids of P27.25 billion while there were P22.19 billion tenders for the P20-billion 14-day term deposits.  The 28-day instruments worth P10 billion fetched total bids of P16.1 billion.

The bids and awards committee made a full award for each instrument.

Bangko Sentral Deputy Governor Diwa Guinigundo said earlier the oversubscription across all tenors since the end of the holiday season showed that domestic liquidity remained ample.

“Liquidity obviously derived from sustained reflow to the banks after the long holiday season and the sustained disbursement by the national government including its infra executing departments,” Guinigundo said.

Guinigundo, however, downplayed the idea of adding another tenor in the weekly auction.

“Not in the near future,” he said.  “There should be clear bucketing between NG and TDF issuances.”

“We don’t want the TDF to compete with the national government’s shortest tenor of 91 days,” Guinigundo said.

The BSP cut the weekly volume to P50 billion from the P70 billion volume in December last year.

It adopted the interest rate corridor system in June 2016 so that through calibrated auctioning, the transmission of monetary policy would improve.

Topics: Bangko Sentral ng Pilipinas , BSP , term deposits
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