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September 29, 2023

Strong demand for BSP bills drives robust bidding

The Bangko Sentral ng Pilipinas (BSP) witnessed robust demand for its securities facility as bids totaled P173.74 billion, surpassing the previous week’s P135.64 billion.

According to BSP Deputy Governor Francisco G. Dakila Jr., the demand for BSP bills remained strong, with tenders exceeding the offered volume of P160 billion.

On Friday, the bid-to-cover ratios (BCR) for the 28-day and 56-day BSP bills stood at 1.088x and 1.080x, respectively. The newly introduced 56-day tenor received bids worth P43.19 billion, surpassing the P40 billion offering, with an average interest rate of 6.6641 percent.

Similarly, the 28-day BSP bill attracted P130.55 billion in tenders against the P120 billion offering, yielding a rate of 6.6619 percent.

The introduction of longer-dated securities by the BSP allows for better liquidity management in the financial system, particularly after the reduction of reserve requirements (RR) for both banks and non-banks.

The lower RR ratio, which became effective on June 30, has provided the BSP with more flexibility in its market-based approach.

The move is aimed at absorbing expected excess liquidity and enhancing the central bank’s ability to address the evolving needs of the financial system.

By offering an additional BSP bill tenor, the central bank aims to maintain stability while fostering a market-driven liquidity management framework.


BSP disqualifies unregistered money service business

The Bangko Sentral ng Pilipinas (BSP) has disqualified Riyben Foreign Exchange for operating an unregistered money service business, part of BSP’s ongoing efforts to curb unauthorized MSBs, following similar actions taken against six other firms earlier this year.

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