BSP cleans P100B from titles
BSP BILL SURSUBSCRIBED The head office of Bangko Sentral ng Pilipinas (BSP) in Manila. According to the BSP, his BSP bill brought in a total of 158.20 billion pesos in offers. PHOTO BY ENRIQUE AGCAOILI
Bangko Sentral ng Pilipinas (BSP) weekly securities auction brought in 100 billion pesos.
The central bank’s one-month BSP bill was oversubscribed by 1.58 times the offered volume of 100 billion pesos, resulting in a total of 158.20 billion pesos “amid heavy interest market players, “according to BSP Deputy Governor Francisco Dakila Jr.
In a statement, he said the weighted average interest rate on the 28-day BSP bill remained stable at 1.8115%, from 1.8158% last week. During the auction, accepted yields declined slightly and remained tight at 1.780-1.825%.
“The results of the auction show continued strong demand from market participants for the BSP bill under normal market conditions and abundant and sustained liquidity in the financial system,” Dakila added.
He added that BangkoSentral’s monetary operations will continue to be guided by its most recent assessment of liquidity conditions and market developments going forward.
BSP securities are monetary instruments issued under the interest rate corridor for its monetary policy implementation and liquidity management operations.
The securities would also add to the financial system’s pool of risk-free assets, alongside those issued by the government that can be traded for liquidity purposes.
Through the regular auctioning of BSP securities, the issuance of these securities can contribute to better discovery of the prices of debt instruments and support the transmission of monetary policy in the process.
The power of the central bank to issue negotiable debt securities, even in normal times, was restored by the law of the Republic (RA) 11211. Enacted in February 2019, RA 11211 amended RA 7653, or the “New Law on the Central Bank of 1993”.
Prior to the amendment, Bangko Sentral debt offers were only allowed in the event of extraordinary price movements.
BSP Governor Benjamin Diokno said earlier that monetary authorities continued to seek improvements in the stocks and improve their pro-market characteristics.