The central bank made a full award of the short-term securities it offered Friday at a lower average rate after the cental bank extended its pause on monetary action, keeping rates at record lows.

The Bangko Sentral ng Pilipinas (BSP) raised P70 billion from 28-day bills, having attracted bids amounting to P109 billion, or about 1.56 times the volume of securities on offer.

In last week’s auction, bids had totaled P96.2 billion.

The bills fetched an average rate of 1.934%, down from 1.963% previously.

Banks sought yields ranging from 1.875% to 1.989%, against the week-earlier range of 1.85-2.05%.

BSP securities and term deposits are designed to mop up excess liquidity and to guide short-term market rates.

The 28-day yields corrected after having risen since mid-February following the central bank’s decision Thursday to keep policy rates unchanged at record lows, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message.

In its second policy-setting meeting of the year, the Monetary Board kept the overnight reverse repurchase rate at 2%, in line with expectations of 19 economists polled by BusinessWorld last week. Rates for the overnight lending and deposit facilities were also maintained at 2.5% and 1.5%, respectively.

“The 28-day BSP auction yield was also lower after the latest tighter quarantine restrictions from March 22-April 4, 2021 (were thought to) slow down demand conditions/economic recovery prospects, which could temper inflation,” Mr. Ricafort said. — Beatrice M. Laforga