BSP 28-day securities rate up, post undersubscription

BSP 28-day securities rate up, post undersubscription

MANILA – The Bangko Sentral ng Pilipinas’ (BSP) 28-day bills registered undersubscription on Friday and its rate rose a day after the central bank again hiked its key rates.

Data released by the central bank showed that the average rate of the debt paper rose to 6.7650 percent from 6.6633 percent during the auction on March 17.

The BSP reduced the offer volume to PHP150 billion from last week’s PHP170 billion but tenders only amounted to PHP130.74 billion.

In a statement, BSP Deputy Governor Francisco Dakila Jr. said yields accepted in this week’s securities auction were “higher and widened to a range of 6.6620 to 7.0000 percent.”

“The results of the auction came as eligible participants prepared for client requirements at the end of the quarter and during the Holy Week holidays,” he said.

Dakila said the central bank’s “monetary operations will continue to be guided by its assessment of the prevailing liquidity conditions and market developments.”

On Thursday, the central bank’s policy-making Monetary Board (MB) hiked the BSP’s key rates by 25 basis points after citing the elevated inflation rate, which is expected to return to within-target 2 percent to 4 percent level by the last quarter of 2023.

This brought the overnight reverse repurchase (RRP) rate to 6.26 percent from a record low of 2 percent in 2020.

In the first two months this year, the rate of price increases averaged at 8.6 percent after the February level decelerated to 8.6 percent from the 14-year high of 8.7 percent in the previous month. (PNA)

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