Advisory on the Gradual Normalization in the TDF and RRP Operations

8 June 2020
Advisory on the Gradual Normalization in the TDF and RRP Operations

Consistent with its practice of assessing current financial system liquidity and market conditions in the conduct of its monetary operations, the BSP will gradually re-offer other tenors in its term deposit facility (TDF). Similarly, the daily offer volumes in the reverse repurchase (RRP) facility will be increased at a measured pace. These operational adjustments will begin on 10 June 2020 with the re-opening of the 14-day TDF and P200-billion auction offering in the RRP facility.

The continued stabilization of liquidity conditions has been observed over the past weeks. Sustained high oversubscriptions in the TDF and RRP auctions indicate that financial market conditions are in place for a gradual normalization in the BSP’s monetary operations. The measured rescaling in the conduct of monetary policy implementation will also provide better guidance to short-term interest rates as the domestic economy slowly reopens.

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The reconfiguration in the auction volumes and tenors in the TDF and RRP are purely operational measures and remain in line with the stance of monetary policy. Moreover, the BSP stands ready to adjust the details of its operations based on market developments and liquidity conditions.

Henceforth, the BSP will announce on a weekly basis the TDF offerings and RRP volumes as part of its operational adjustment towards the “New Economy.”

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Bangko Sentral ng Pilipinas

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