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TDF auction attracts P645.18-B bids

The central bank’s term deposit facility (TDF) continue to be oversubscribed at P645.18 billion on Wednesday from a higher offer of P430 billion this week versus P390 billion previously as banks’ abundant liquidity are increasing demand for all tenors.

 Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said liquidity infused by the BSP to the financial system has reached P1.5 trillion as of latest tally. This is equivalent to 7.6 percent of gross domestic product and “part of (BSP’s) liquidity-easing measures to address the impact of COVID-19 pandemic,” he said in a Tuesday webinar.

 BSP Deputy Governor Francisco G. Dakila Jr. said the TDF auction results still indicate “ample liquidity in the financial system” and that the BSP “will remain guided by its assessment of liquidity conditions and market developments in the conduct of its monetary operations.”

 “The TDF offering in (this week’s) auction was increased to P430 billion from P390 billion last week (and) all tenors were oversubscribed with the 7-day, 14-day and 28-day TDF receiving tenders 1.40x, 1.49x and 1.93x their respective offer volumes. Total tenders reached P645.18 billion,” said Dakila.

 The average weighted rates of the TDF was mixed ahead of the BSP’s policy meeting this week where most economists expect a “no change” decision from the Monetary Board.

 The 7-day and 28-day tenors have higher interest rates this week while the 14-day’s yield declined. Dakila noted that the range of yields accepted were narrower, as follows: 1.820-1.860 percent in the 7-day TDF; 1.820-1.870 percent in the 14-day TDF; and 1.820-1.850 percent in the 28-day TDF.

 The 7-day tenor had a higher offer of P180 billion this week from P170 billion, receiving tenders worth P251.53 billion. The bids were lower compared to September 23’s P256.56 billion. The average rate was up at 1.8377 percent from 1.8346 percent last week.

 The 14-day, offered higher at P200 billion from P190 billion, attracted P297.14 billion tenders. The bids were higher than the previous week’s P253.87 billion. The yield was down at 1.8485 percent from 1.8520 percent.

 The BSP increased the 28-day TDF’s offer this week to P50 billion from P30 billion. Demand for the longest-dated TDF seem unaffected by the central bank’s issuance of 28-day BSP Bills for the past two Fridays.  The 28-day TDF received P96.51 billion tenders, higher than September 23’s P58.88 billion. The average rate was up at 1.8426 percent from 1.8416 percent

Source: Manila Bulletin (

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