T-bill rates end mixed

Yields on Treasury bills (T-bills) ended mixed on Monday’s auction as the market awaits the Monetary Board’s policy meeting on Thursday, albeit expecting the central bank to defer rate cuts this month.

The Bureau of the Treasury was able to borrow its target amount of P20 billion via T-bills as the total bids reached P52.5 billion, exceeding the original size of issuance by 2.6 times.

READ: Rates on T-bonds rises on higher inflation

The 91-day T-bills averaged 5.900 percent, more expensive than the 5.828 percent rate last week while the yield on the 181-day T-bill went up by 6.093 percent from 6.062 percent previously.

Meanwhile, rates for the 364-day debt paper went down by 6.062 percent from 6.074 percent.

Wait and see

Noel Reyes, chief investment officer for Trust and Asset Management Group at Security Bank Corp. said that the market is awaiting the central bank’s policy decision in the next Monetary Board meeting this week. “There is now a chance there will not be a rate cut action and that Bangko Sentral ng Pilipinas (BSP) may hold given the recent stronger gross domestic product and inflation numbers,” Reyes said.

BSP Governor Eli Remolona Jr. hinted earlier this week that the widely expected rate cut this month is now a “little less likely” after the inflation accelerated in July and stronger economic growth for the second quarter.

The economy expanded by 6.3 percent last quarter, beating market expectations and settling well within the government’s 6 to 7 percent target for the year.

The country’s growth rate outpaced Indonesia’s 5.05 percent, China’s 4.7 percent and Malaysia’s 5.8 percent. It only fell behind Vietnam’s 6.9 percent.

Meanwhile, inflation in July surged to a nine-month high of 4.4 percent, marking the first time that inflation breached the central bank’s 2 to 4 percent target range for the year. INQ