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5-yr T-bond rate falls to record low 4.625%


The yield on five-year Treasury bonds (T-bonds) fell to an all time low of 4.625 percent in Tuesday’s auction. Tenders for the T-bonds due November 2015 totaled P16.3 billion, compared to the offering size of P8 billion. National Treasurer Roberto Tan told reporters a liquid market, coupled with the Monetary Board decision to keep policy rates unchanged at record lows, brought down the yield on government’s five-year debt paper. “There is very strong liquidity and the policy stance of the BSP also helped. This means that there is no anticipation of a policy [rate] increase," Tan said. Earlier, the yield on government's 91-, 182-, and 364-day Treasury bills (T-bills) hit new lows. The three-month T-bill rates plunged by 192 basis points to 1.48 percent, that of the six-month debt papers fell 195.8 basis points to average at 1.983 percent, and that of the one-year indebtedness by 177.1 basis points to 2.394 percent. The overnight borrowing rate still stands at a record low of 4 percent and the overnight lending rate at 6 percent. — VS/OMG, GMANews.TV

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