Smarter News Now
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting
No Result
View All Result
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
No Result
View All Result
Smarter News Now
No Result
View All Result
Home Investing News

Yields on term deposits rise after BSP rate hike

by
July 20, 2022
in Investing News
0
Yields on term deposits rise after BSP rate hike
0
SHARES
8
VIEWS
Share on FacebookShare on Twitter
BW FILE PHOTO

YIELDS on the term deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) increased on Wednesday amid slightly weaker demand and after the central bank unexpectedly hiked benchmark interest rates last week.

Total bids for the central bank’s term deposits reached P321.566 billion on Wednesday, short of the P330-billion offer and also lower than the P385.602 billion in tenders recorded last week.

Broken down, the seven-day papers fetched bids amounting to P151.948 billion, lower than the P160 billion auctioned off by the BSP. It was also less than the P204.106 billion in tenders logged the previous Wednesday.

Banks asked for yields ranging from 2.75% to 3.69%, climbing from the 2.64% to 2.71% band seen a week ago. This caused the average rate of the one-week paper to rise by 56.21 basis points (bps) to 3.2459% from 2.6838% last week.

Meanwhile, demand for the 14-day term deposits amounted to P169.618 billion, below the P170-billion offering as well as the P181.493 billion in tenders recorded a week ago.

Accepted rates for the papers were from 2.775% to 3.72%, higher and wider than the 2.625% to 2.75% margin seen on July 13. With this, the average rate of the two-week paper increased by 61.82 bps to 3.3417% from 2.7235% in the prior auction.

The central bank has not auctioned 28-day term deposits for more than a year to give way to its weekly offering of securities with the same tenor.

The term deposits and the 28-day bills are used by the BSP to mop up excess liquidity in the financial system and to better guide market rates.

“The results of the auction show that there has been a partial pass-through of the policy rate to market rates amid ample overall liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement. “The weighted average interest rates of both tenors increased, reflecting the impact of the 75-bp hike in the policy interest rate on 14 July 2022.”

“Moving forward, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” Mr. Dakila said.

The BSP last week raised benchmark interest rates by an all-time high 75 bps in an off-cycle move and left the door open for further tightening amid growing risks to inflation.

BSP Governor Felipe M. Medalla said the Monetary Board’s “significant” hike was due to signs of “sustained and broadening price pressures” as well as spillover effects from aggressive tightening in other countries, such as the United States, amid global inflation concerns.

The hike was done outside of their scheduled policy meetings and was the first off-cycle increase since April 16, 2020. Following Thursday’s move, the BSP has now raised rates by a total of 125 bps this year and the key rate is now at 3.25%, matching the March 2020 level.

The BSP has become more aggressive as headline inflation reached 6.1% in June, the fastest in nearly four years. This brought the first-half average to 4.4%, above the central bank’s 2-4% goal but still lower than its 5% forecast for the year.

TDF yields were also higher amid hawkish signals from the US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Fed is widely expected to raise interest rates by at least 75 bps at its July 26-27 meeting to combat inflation, which quickened to a 40-year high of 9.1% in June. — Keisha B. Ta-asan

ShareTweetPin

Related Posts

Senate grills Rodriguez on approval procedures for sugar import order
Investing News

Senate grills Rodriguez on approval procedures for sugar import order

August 23, 2022
Trade dep’t expecting sugar price monitoring report by Friday
Investing News

Trade dep’t expecting sugar price monitoring report by Friday

August 23, 2022
Fisherfolk seek halt to reclamation on municipal fisheries
Investing News

Fisherfolk seek halt to reclamation on municipal fisheries

August 23, 2022
Supreme Court rules petitioners have no standing in PDS ‘monopoly’ case
Investing News

Supreme Court rules petitioners have no standing in PDS ‘monopoly’ case

August 23, 2022
ERC signals planned overhaul of regulatory practices via benchmarking exercise with regional counterparts
Investing News

ERC signals planned overhaul of regulatory practices via benchmarking exercise with regional counterparts

August 23, 2022
Malaysian trade official urges PHL to sign up for RCEP  
Investing News

Malaysian trade official urges PHL to sign up for RCEP  

August 23, 2022
Next Post
Asian Games rescheduled for next year in Hangzhou, China

Asian Games rescheduled for next year in Hangzhou, China

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Email Address *
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!
 

Recommended

SRA faces overhaul after import mess

SRA faces overhaul after import mess

August 17, 2022
Getting to Know You: Tanya King, Cryptocurrency Advisor

Getting to Know You: Tanya King, Cryptocurrency Advisor

June 30, 2022
Retail association outlook positive for remainder of 2022

Retail association outlook positive for remainder of 2022

July 10, 2022
Paolo Ballesteros to host Drag Race Philippines

Paolo Ballesteros to host Drag Race Philippines

July 14, 2022
In Hong Kong, Xi says ‘one country, two systems’ is here to stay

In Hong Kong, Xi says ‘one country, two systems’ is here to stay

July 1, 2022
Authentic Purposes behind The AI Content Moderation

Authentic Purposes behind The AI Content Moderation

July 17, 2022
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting

Copyright © 2022 SmarterNewsNow.
All Rights Reserved.

Disclaimer: SmarterNewsNow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

No Result
View All Result
  • About Us
  • Contact Us
  • Email Whitelisting
  • Home
  • Privacy Policy
  • Terms & Conditions
  • Thank You

Copyright © 2020 SmarterNewsNow. All Rights Reserved.