MANILA – Strong demand for term deposit facility on high excess liquidity resulted in across-the-board drop of interest rates Wednesday.
Data released by the Bangko Sentral ng Pilipinas (BSP) Wednesday showed that rate of the seven-day facility dropped to 4.3486 percent from last week’s 4.4141 percent.
This tenor was offered for P10 billion and tenders reached P23.7 billion.
Bid coverage ratio increased to 2.3700 from last week’s 2.4905.
Rate of the 14-day facility declined to 4.3995 percent from 4.4352 during the auction last Sept. 4.
Tenders reached P34.454 billion, higher than the P20-billion offer.
Bid coverage ratio declined to 1.7227 from last week’s 2.2980 as last week’s P10-billion offer was met by P22.98-billion bids.
Average rate of the 28-day facility went down to 4.4907 percent from last week’s 4.4950 percent.
Tenders totaled to P35.241 billion, higher than the P20-billion offer. Bid coverage ratio improved to 1.7621 from last week’s 1.4085.
Total offering in this week’s auction was increased to P50 billion from last week’s P40 billion.
BSP deputy governor Francisco Dakila Jr. attributed this to “anticipation of higher excess liquidity to be siphoned from the financial system as a result of funds released from the deposits of the National Government with the BSP.” (PNA)