The central bank made a full award of the P100 billion worth of 28-day bills on offer Friday, with strong demand pushing down rates.
The Bangko Sentral ng Pilipinas (BSP) said total tenders amounted to P183.25 billion, or 1.83 times the supply of bills.
Demand rose 10.5% from the previous auction last week.
The average yield was 1.749%, down from 1.762% a week earlier.
Banks sought yields of between 1.74% and 1.753%, trending lower from the 1.7475%-1.78% range in the previous auction.
“The auction results are in line with current market developments as financial system liquidity remains ample,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.
The Monetary Board of the BSP kept its key policy rates steady to support the economy’s recovery, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.
For the sixth straight meeting on Thursday, the central bank retained its key policy rate unchanged at a record low of 2%, as expected by the 18 analysts polled by Businessworld last week. – Beatrice M. Laforga
The BSP also maintain the overnight deposit and lending rates at 1.5% and 2.5%, respectively.
It cited the need to support economic recovery, especially after several parts of the country, including Metro Manila, was placed under the strictest form of lockdown again amid a resurgence in infections.
“Moving forward, the BSP’s monetary operations will continue to be guided by its latest assessment of liquidity conditions and market developments,” Mr. Dakila said.