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91-day T-bill rate dips to 6.657% |
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By LEE C. CHIPONGIAN
The Manila Bulletin 04/19/2005 The bellwether 91-day Treasury bill rate, used by banks in pricing local loans, fell at yesterday’s auction by the Bureau of Treasury due to high liquidity in the market. The markets’ mild appetite pushed the 91-day T-bill rates by 2.8 basis points lower to 6.657 percent from 6.685 percent and the Bureau of Treasury accepted P2 billion of P8. 515-billion total tenders, rejecting P6.515 billion of the bids. The BTr declined some of the high bids, owing to the cash position of the government, and partial rewards were released. Following benchmark rates, 182-day debt papers also ended lower by 14 basis points at 7.85 percent from 7.99 percent last week with the BTr rejecting P3.235 billion of excess bids as auctioneers were prepared only to accept P2 billion against tendered of P5.233 billion. Both 91-day and 182-day declined while one-year Tbills ended the day higher at 8.792 percent from the previous 8.147-percent. For the auction of 364-day T-bills the BTr accepted P2 billion of P3.855 billion tendered, rejecting P1.855 billion. National Treasurer Omar Cruz said the market continues to be liquid and levels are "at all time high." "The market appetite remains with the shorter-dated debt," he said yesterday. Cruz maintains that the government can afford to decline bids since the cash position is at comfortable levels. The Department of Finance recently raised $1.5 billion from the issuance of bonds and this boosted local liquidity. "The BTr doesn’t need the money," he said. Traders said the market players will seek premium rates and the rise in 364-day T-bill rates was tempered by the rejection of some bids by the BTr. The market, also according to traders, has been factoring in the steep oil prices and higher inflation. At the moment, BTr officials said the government could afford to reserve the amount and reject low bid auctions because of the liquid market. Cruz said the government is seeing a yield curve due to excess domestic liquidity. |
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