Loaded, banks swarm BSP’s liquidity window

Financial institutions crowded the Bangko Sentral ng Pilipinas’ (BSP) 28-day liquidity management window after regulators accepted bids for longer term deposits for the first time in nearly two months.

Data from the central bank showed banks submitted P51.4 billion in bids for the P20 billion offered, meaning that the reopening of the facility was over twice oversubscribed by market players who had very few options for parking their longer term funds in the last few weeks.

BSP Gov. Nestor Espenilla Jr. last week told reporters the central bank decided to reopen its 28-day term deposit facility due to clamor from banks who were seeking instruments to help them manage their liquidity beyond the shorter 7-day facility.

Yesterday’s 28-day window was pegged at an interest rate of 3.0183 percent, lower than the 3.4954 percent it had fetched on Dec. 13, 2017. The facility was already undersubscribed at that time due to banks’ waning interest.

Meanwhile, the 7-day facility was also oversubscribed yesterday with P88.7 billion in bids submitted by banks for the P40 billion offered by the BSP. The average yield for this window was slightly lower at 2.7278 percent versus the previous week’s 2.7785 percent.

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