MANILA – Rate of the Bangko Sentral ng Pilipinas’ (BSP) seven-day term deposit facility (TDF) fell Wednesday due to strong demand and further cut in the central bank’s key policy rates.
Data released by the central bank showed that average accepted yield of the facility fell to 2.4369 percent from 2.9578 percent during the auction last April 15.
BSP offered the facility at PHP30 billion and made a full award after tenders reached PHP119.288 billion.
The large volume of bids resulted in the bid coverage ratio of 3.9763 this week.
This is higher than the 2.6165 bid coverage ratio in the previous week’s auction when tenders reached PHP78.496 billion, more than twice the PHP30-billion offer.
In a statement, BSP Deputy Governor Francisco Dakila said the 52.1 basis points drop in the seven-day TDF’s average rate “is consistent with the 50 basis points cut in the (BSP) policy rate on 16 April 2020.”
“More importantly, the results of today’s auction reflect the impact of the recent measures by the BSP to boost market liquidity as well as indicative of a broader increase in market appetite for BSP instruments and government securities,” he added.