By Joann Villanueva/PNA
MANILA — The rates of Bangko Sentral ng Pilipinas’ (BSP) Term Deposit Facility (TDF) rose across-the-board Wednesday in line with the rise of central bank’s key policy rates.
Rate of the seven-day facility improved to 4.9738 percent from 4.8291 percent during the auction last November 14.
Average accepted yield of the 14-day facility rose to 5.0596 percent from the previous week’s 4.8642 percent.
Also, the 28-day facility’s average rate increased to 5.1186 percent from 4.9162 percent last week.
These hikes are taking place just as the BSP went ahead with its tightening of key policy rates.
Just this month, the central bank’s policy-making Monetary Board (MB) increased by 25 basis points the BSP’s key rates, bringing the total hikes this year to 175 basis points.
To date, the overnight reverse repurchase (RRP) rate is 4.75 percent, the overnight repurchase rate (RP rate) is 5.25 percent and the overnight deposit rate is 4.25 percent.
Meanwhile, banks have been submitting bids that are higher than the offering for the facilities, thus, the upticks of the TDF’s bid coverage ratio.
This is reportedly due to expectations that domestic inflation has plateaued for the year, after it posted a flat rate of 6.7 percent last October, unchanged from the previous month’s level.
Bid coverage ratio of the seven-day facility rose to 1.3547 from 0.7082 last week, the 14-day’s to 1.4881 from 0.9660 and the 28-day’s to 1.4413 from 0.5449 during the auction last November 14.
For the auction on November 28, BSP will offer the seven-day facility for PHP40 billion, the 14-day facility for PHP20 billion and the 28-day facility to PHP10 billion.
