Rate spike dis­re­gards T-bond bids

Such sanc­tion will in­crease the num­ber of the un­em­ployed among our coun­try­men at the time when they most need jobs

Daily Tribune (Philippines) - - BUSINESS - BY JOSHUA LAO @tri­bunephl_lao

The ul­tra-high rate wit­nessed in the Bureau of Trea­sury’s (BTr) reis­sued 10-year Trea­sury bond prompted a full re­jec­tion from the agency, de­spite strong mar­ket de­mand.

“(In­vestor) ap­petite re­mains on the im­me­di­ate part of the curve (as they) see pol­icy rates will re­main steady for the rest of the year,” Na­tional Trea­surer Ros­alia de Leon said.

Should be awarded in full, the 10-year IOU will fetch an av­er­age rate of 3.329 per­cent, a 60.5 ba­sis point in­crease from the reis­sued 10-year T-bond in Au­gust 2020.

“Nev­er­the­less, the auc­tion was over­sub­scribed with to­tal bids reach­ing P44.5 bil­lion, more than 1.4 times the P30 bil­lion of­fer­ing,” the BTr said.

The Trea­sury chief ear­lier said that am­ple liq­uid­ity re­mains in the fi­nan­cial sys­tem fol­low­ing the Bangko Sen­tral ng Pilip­inas’ (BSP) salvo of eas­ing mea­sures in­clud­ing the re­duc­tion on both its key in­ter­est and re­serve re­quire­ment (RR) lev­els.

As such, in­vestors con­tinue to flock to­wards the BTr’s se­cu­rity is­suances given its low-risk na­ture amid mar­ket un­cer­tainty due to the health cri­sis.

To re­call, the BSP launched its own se­cu­ri­ties last week, which re­ceived an over­sub­scrip­tion of 2.2 times the orig­i­nal vol­ume cou­pled with a low rate, hence, the de­ci­sion to award the IOU in full.

PHO­TO­GRAPH BY L. BU­LA­CAN FOR THE DAILY TRI­BUNE

AM­PLE liq­uid­ity re­mains in the fi­nan­cial sys­tem fol­low­ing the Bangko Sen­tral ng Pilip­inas’ salvo of eas­ing mea­sures in­clud­ing the re­duc­tion on both its key in­ter­est and re­serve re­quire­ment lev­els.

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