BSP accepts bids for 7-day term deposits

The Bangko Sentral ng Pilipinas awarded the entire P40 billion in seven-day term deposits auctioned off yesterday as banks were limited to just one tenor of the facility.

Banks tendered P46.212 billion for the one-week TDF, which the BSP accepted 3.125-3.5 percent yield.

Next week, the BSP will offer another P40 billion in seven-day TDF.

The BSP earlier reduced its TDF offering to P40 billion of the shorter tenor and stopped the auction of the 28-day facility on expectations of higher demand from bank customers.
It cut to P80 billion (P40 billion in seven-day and P40 billion in 28-day) the offering in the first two weeks of December from P130 billion in November.

“TDF offerings are based on our careful liquidity forecasts. Our numbers suggest that banks continue to lend more, buy foreign exchange for imports, debt servicing and foreign investments…. It follows that the BSP should trim its open market operation lest we see tight market conditions,” Deputy Governor Diwa C. Guinigundo said.—BEN O. DE VERA