MANILA - The Philippine central bank announced the launch on Monday of an interest rate swaps market anchored to a newly established benchmark rate to enhance bond market trading and liquidity.
IRS, a fixture of developed fixed-income markets, lets parties manage rate risk or bet on the direction of borrowing costs by exchanging fixed and floating interest rate streams. "We are excited for PESO IRS to go live to help boost transactions, create a benchmark yield curve, and deepen our capital markets," central bank Governor Eli Remolona said in a statement."A benchmark curve will help banks and other lenders price loans at various maturities."
Bangko Sentral ng Pilipinas also said it was working on adopting global master repurchase agreement contracts that will allow banks to access treasury bonds for repo transactions to boost the government securities repo market.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.