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  • Writer's pictureBy The Financial District

BSP Eyes Active Market Role

The Bangko Sentral ng Pilipinas (BSP) and the Bankers Association of the Philippines (BAP) have agreed to work together to deepen the repo interbank market.


A market-maker trades securities and other instruments and creates a market by providing liquidity.



In line with the BSP’s aims of coming up with a reliable yield curve by January 2024, its transition from its Traditional role of lender of last resort. Also, the Bangko Sentral ng Pilipinas (BSP) will instead be transitioned ”as market-maker of last resort” to ensure liquidity at all times.


According to BSP Governor Eli M. Remolona, as the BSP helps banks develop a credible yield curve for two maturities: the 5- and 10-year, the BSP will fulfill its role as a market-maker as well.



He explained that a market-maker trades securities and other instruments and creates a market by providing liquidity.


Meanwhile, the BSP has initiated a move to create an interbank rate or a benchmark short rate for launching by early December this year, a month before the yield curve deadline.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

Remolona said the interbank rate will be the peso equivalent of the Secured Overnight Financing Rate (SOFR), which is an average rate used by the US to replace the discontinued London Inter-Bank Offered Rate or LIBOR.





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