Invest Daily Pro
  • Economy
  • Investing
No Result
View All Result
  • Economy
  • Investing
No Result
View All Result
Invest Daily Pro
No Result
View All Result
Home Top News

Yields on BSP’s term deposits inch lower after Fed rate cut

by
November 13, 2024
in Top News
0
Yields on BSP’s term deposits inch lower after Fed rate cut
0
SHARES
3
VIEWS
Share on FacebookShare on Twitter
BW FILE PHOTO

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits went down on Wednesday after the US Federal Reserve delivered another rate cut last week.

The BSP’s term deposit facility (TDF) attracted bids amounting to P291.099 billion on Wednesday, higher than the P230 billion on the auction block as well as the P250.427 billion seen a week ago for a P210-billion offer.

Broken down, tenders for the seven-day papers reached P155.328 billion, higher than the P130 billion auctioned off by the central bank and P133.311 billion in bids for a P120-billion offer seen the previous week.

Banks asked for yields ranging from 5.955% to 6.1%, slightly narrower than the 5.955% to 6.13% band seen a week ago. This caused the average rate of the one-week deposits to inch down by 0.68 basis point (bp) to 6.0824% on Wednesday from 6.0892% previously.

Meanwhile, bids for the 14-day term deposits amounted to P135.771 billion, above the P100-billion offering and the P117.116 billion in tenders for the P90 billion placed on the auction block a week ago.

Accepted rates for the tenor were from 6.1167% to 6%, wider than the 6.1281% to 6% margin recorded a week ago. With this, the average rate for the two-week deposits fell by 1.14 bps to 6.1167% from the 6.1281% logged in the prior auction.

The central bank has not auctioned off 28-day term deposits for more than four years to give way to its weekly offerings of securities with the same tenor.

The term deposits and the BSP bills are used by the central bank to mop up excess liquidity in the financial system and to better guide market rates.

TDF yields went down on Wednesday after the US central bank’s policy decision last week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Any possible protectionist Trump policies could reduce future Fed rate cuts and, in turn, could also reduce local policy rate cuts,” Mr. Ricafort added.

The Federal Reserve cut interest rates by a quarter of a percentage point last week as its policy makers began taking stock of what could become a more complex economic landscape when US President-elect Donald J. Trump takes office next year, Reuters reported.

Fed Chair Jerome H. Powell said the results of the presidential election, which paved the way for a US chief executive who has pledged widespread deportation of immigrants, broad-based tariffs, and tax cuts, would have no “near-term” impact on US monetary policy.

Mr. Powell said the Fed will continue assessing data to determine the “pace and destination” of interest rates as officials reset currently tight monetary policy to account for inflation that has slowed markedly in the past year and is nearing the US central bank’s 2% target.

But as the new administration’s proposals take shape, the Fed chief said the central bank would begin estimating the impact on its twin goals of stable inflation and maximum employment.

“It’s a process that takes some time,” said Mr. Powell, who spoke in a press conference following the Fed’s decision to reduce its benchmark overnight interest rate to the 4.5%-4.75% range. “It’s all of the policy changes that are happening. What’s the net effect? The overall effect on the economy at a given time? That’s a process… we go through all the time with every administration.”

For now, at least, both inflation and interest rates are moving lower in line with a Fed outlook that sees price pressures continuing to ease amid ongoing economic growth and a job market the central bank says has “generally eased” but remains healthy.

Mr. Powell said for now the economic outlook was solid and the Fed hoped to keep it that way.

“This further recalibration of our policy stance will help maintain the strength of the economy and the labor market, and will continue to enable further progress on inflation as we move toward a more neutral stance over time,” Mr. Powell said.

The Fed’s policy statement noted that risks to the job market and inflation were “roughly in balance,” repeating language from the statement released after its Sept. 17-18 meeting.

The new statement also slightly altered the reference to inflation, saying that price pressures had “made progress” towards the Fed’s objective, rather than the prior language that it had “made further progress.”

Mr. Powell said that the language change was not meant to signal that inflation has been sticky. The Fed, he said, has always expected progress to be bumpy, and policy makers have gained confidence that inflation is on a sustainable path to the 2% goal. — Luisa Maria Jacinta C. Jocson with Reuters

ShareTweetPin

Related Posts

Have a taste of the perfect day in paradise with SULÀ Spirits
Top News

Have a taste of the perfect day in paradise with SULÀ Spirits

January 8, 2025
First months of 2025 likely rainy amid La Niña conditions, says PAGASA
Top News

First months of 2025 likely rainy amid La Niña conditions, says PAGASA

January 8, 2025
December inflation rises to 2.9%
Top News

December inflation rises to 2.9%

January 7, 2025
Outstanding debt hits fresh high of P16.09T
Top News

Outstanding debt hits fresh high of P16.09T

January 7, 2025
Outstanding debt hits fresh high of P16.09T
Top News

Outstanding debt hits fresh high of P16.09T

January 7, 2025
PHL end-December dollar reserves drop to $106.8B
Top News

PHL end-December dollar reserves drop to $106.8B

January 7, 2025
Next Post
Solaire’s Waterside sizzles with four hands

Solaire’s Waterside sizzles with four hands

Recommended

T-bill, bond rates may be mixed on BSP, Fed bets

T-bill, bond rates may be mixed on BSP, Fed bets

December 8, 2024
Seaman awarded $60,000 in disability benefits

Seaman awarded $60,000 in disability benefits

September 5, 2024
House OKs bill vs election swap

House OKs bill vs election swap

August 21, 2024
Getting to Know You: Jesse Swash, Co-Founder of Design by Structure

Getting to Know You: Jesse Swash, Co-Founder of Design by Structure

August 7, 2024
SaveMoneyCutCarbon partners with ABB, prominent EV charger manufacturer, to offer unparalleled support to UK clients

SaveMoneyCutCarbon partners with ABB, prominent EV charger manufacturer, to offer unparalleled support to UK clients

October 2, 2024
Recession Ahead? Sector Rotation Model Warns of Rising Risk

Recession Ahead? Sector Rotation Model Warns of Rising Risk

May 11, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 InvestDailyPro. All Rights Reserved.

    Disclaimer: InvestDailyPro.com, its managers, its employees, and assigns (collectively InvestDailyPro ) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
    The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    No Result
    View All Result
    • About us
    • Contact us
    • Home
    • Privacy Policy
    • Suspicious engagement
    • Terms & Conditions
    • Terms & Conditions
    • Thank you

    Copyright © 2024 investdailypro.com | All Rights Reserved