THE BANGKO SENTRAL ng Pilipinas (BSP) made a full award of the short-term securities it offered Friday its average rate dipped on the back of the peso’s climb.

The central bank awarded P100 billion in 28-day bills out of P139.05 billion in bids. However, this was lower than the P147.84 billion in tenders seen a week earlier.

Banks asked for yields between 1.7425% and 1.8%, a narrower range compared to last week’s 1.74% and 1.825%. This brought the average rate of the one-month securities to 1.77642%, lower than 1.7832% previously.

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

“The auction results continue to reflect stable market conditions as liquidity in the financial system remain ample. Moving ahead, the BSP’s monetary operations will remain guided by its latest assessment of the liquidity conditions and market developments,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the BSP securities’ average yield was slightly lower on the back of the peso’s strength versus the dollar.

“BSP 28-day securities auction yield also eased on improved market sentiment after NCR’s (National Capital Region) Alert Level was eased to 3 (from 4) and some businesses were allowed to resume operations or operate at higher capacity, thereby further reopening the economy,” he said.

The peso appreciated on Thursday after the government relaxed mobility restrictions in the capital. The local unit closed at P50.605 per dollar, appreciating by five centavos its P50.655 finish on Wednesday.

Mr. Ricafort also noted a downward correction in the US and global interest rates after US President Joe Biden on Thursday signed a bill raising the country’s debt limit to $28.9 trillion. This delayed the risk of default until early December, Reuters reported. — J.P. Ibañez with Reuters