HIGHER INFLATION STANCE BALLOONS IOU RATES
The increase in 91-day was due to expectations of a higher inflation print in November following the spate of typhoons
Higher inflation outlook for the month of November pushed the Bureau of Treasury’s (BTr) Treasury bill ( T- bill) rates higher than last week’s, with the exception for the 364- day IOU.
Nevertheless, the BTr was able to raise its full P20 billion offer after attracting a total of P75.9 billion worth of bids, oversubscribing the original amount by 3.7 times.
National Treasurer Rosalia de Leon said that recent weather disturbances were expected to push inflation for the month of November, hence, the market was pricing in their expectations with the current rates.
“(The) increase in 91-day (was) due to expectations of a higher inflation print in November following the spate of typhoons,” De Leon said.
Aggressive demand
According to her, they won’t be opening their tap facility this time despite the aggressive demand displayed during the auction.
Rates for both the 91- and 182- day T- bills averaged 1.006 and 1.386 percent, respectively, two and 0.1 basis point increase from the posted 0.986 and 1.385 percent last week.
Yield for the 364- day tenor, meanwhile, fetched an average of 1.693 percent, a 0.2 basis point improvement from the recorded 1.695 percent in the same comparable period.
The local financial market remains liquid as the Bangko Sentral ng Pilipinas ( BSP) undertook various measures to increase such, including the string of reduction in its key interest rates and reserve requirement ratios.
While at it, economic analysts explained that investors continue to prefer less volatile assets such as government-issued debt papers, hence, the full award decision in the previous BTr and BSP auctions.