The Bangko Sentral ng Pilipinas (BSP) and Bankers Association of the Philippines (BAP) are launching an improved peso interest rate swap market to enhance benchmark yield curves used in pricing loans and bonds. The new system will utilize the Peso Interest Rate Swap (IRS) overnight reference rate (ORR), derived from the BSP’s variable overnight reverse repurchase or ORRP rate.
This is AI generated summarization, which may have errors. For context, always refer to the full article.
The BAP will create the Peso Interest Rate Swap overnight reference rate , which is derived from the BSP’s variable overnight reverse repurchase or ORRP rate. The ORRP rate is actively set in daily auctions by the BSP and reflects short-term borrowing costs for banks. The ORR is yet to be formally recognized by the International Swaps and Derivatives Association, though this endorsement may be secured before the end of 2024. Despite this, the BSP sees the development as an improvement over current practices, where loan pricing is “unevenly based on the yields of thinly traded government securities.”
“These benchmarks are expected to provide market participants with a better avenue to price interest rates for bonds and loans. By better management of relevant risks, the overall Philippine market will benefit due to greater confidence from both local and foreign investors and financial institutions — thus leading to more robust market activity in the future,” BAP president Jose Teodoro Limcaoco also said on Monday.
Financial Markets Philippines Banking Interest Rates Benchmarking
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Lito Adiwang sees growing interest in Muay Thai, kickboxing in the PhilippinesLito “Thunder Kid” Adiwang is one of the few Filipinos who’s grown to love Muay Thai and kickboxing despite the two said sports taking a backseat to boxing and mixed martial arts.
Read more »
Peso, stock market edge down ahead of expected Fed rate cutTHE peso and stock market slipped on Wednesday as investors awaited the results of a US Federal Reserve (Fed) meeting.
Read more »
Philippines, China to resume talks amid escalating tensions in West Philippines SeaDefining the News
Read more »
Agoda and TPB Philippines join hands to bring the world to the Philippines’ shoresDefining the News
Read more »
HK central bank cuts interest rateHONG KONG — The Hong Kong Monetary Authority (HKMA) on Thursday cut its base rate charged via the overnight discount window by 50 basis points to 5.25 percent, tracking a move by the US Federal Reserve.
Read more »
US central bank seen announcing first interest rate cut since 2020WASHINGTON — The Federal Reserve is gearing up to announce its first interest rate cut for more than four years on Wednesday, US time, with policymakers expected to debate how big a move to make less than two months before the US presidential election.
Read more »