2024-11-14 14:09:24 :
(Bloomberg) — Philippine banks are likely to energize markets on Monday by starting interest rate swap transactions that are key to attracting more foreign capital into one of Asia’s fastest-growing economies.
Swap market makers are ready to trade, according to people familiar with the matter. But they said it remained to be seen how active the market would be when it was reintroduced, after it tapered off last year when the global use of LIBOR was stopped.
The Philippine Bankers Association said in late September that the market would come online once the International Swaps and Derivatives Association recognizes the Overnight Reference Rate (ORR) as a floating rate benchmark. The market maker will provide a two-way quote for the swap against ORR.
People familiar with the matter said there are good signs that the industry group will release the ORR on Friday and plans to start trading on the next working day. Requested anonymity discussing private information. Trading hours will be from 9 a.m. to 4 p.m., a person familiar with the matter said.
Philippine banks, in partnership with the Bangko Sentral ng Pilipinas, launched a revamped interest rate swap market this year to create alternative benchmarks for loan pricing. Strengthening the bond repurchase agreement market is also on the agenda.
The broader goal is to deepen domestic capital markets to help companies raise funds beyond bank borrowing and provide investors with more options.
Bloomberg LP, the parent company of Bloomberg News, will provide the trading platform for the peso IRS.
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