The Bank's reserve requirements are stable for the time being – BSP

<img width = "825" height = "450" ​​class = "entry-thumb" src = "http://www.bworldonline.com/wp-content/uploads/2018/07/bank-vault-072718 .jpg "srcset =" http://www.bworldonline.com/wp-content/uploads/2018/07/bank-vault-072718.jpg 825w, http://www.bworldonline.com/wp-content/uploads /2018/07/bank-vault-072718-300×164.jpg 300w, http://www.bworldonline.com/wp-content/uploads/2018/07/bank-vault-072718-768×419.jpg 768w, http: / /www.bworldonline.com/wp-content/uploads/2018/07/bank-vault-072718-400×218.jpg 400w, http://www.bworldonline.com/wp-content/uploads/2018/07/bank- vault-072718-770×420.jpg 770w "sizes =" (max-width: 825px) 100vw, 825px "alt =" THE BANGKO SENTRAL np Pilipinas (BSP) will not introduce any other reductions in bank reserves required this year, said its leader, and could pause until inflation picks up the target in 2019.

BSP governor Nestor A. Espenilla, Jr. said that two reductions in the rate of obli reserves (RRR) introduced earlier this year should suffice for the moment, as the central bank is taking stock of inflation

"We have already made significant progress this year," Espenilla told analysts Wednesday afternoon.

The BSP chief met Wednesday with banking economists and other market observers to "promote a better understanding". The central bank's mandate comes from the fact that some analysts have signaled confusing signals from the central bank, especially on the timing of interest rate adjustments.

Since June, universal and commercial banks are held Both RRR cuts of one percentage point each have released about 200 billion pesos for the increase in loans and investment banking, although the BSP stated that they were siphoned off by his weekly term deposit auctions (19659003).

Some economists have argued that the RRR cuts in March and June went against the 25-basis-point increase in interest rates by the Monetary Board, the first to inject cash in the system. yields.

"This initiative may resume next year just as inflation returns to the target based on our forecasts." The goal of achieving a single digit RRR here the end of my term is therefore quite achievable without sacrificing effective monetary control, "Espenilla told reporters via a WhatsApp message

in recent months and peaked at 5.2% in June. Prices rose an average of 4.3% over the last six months, compared to a projection of 4.5% for the entire year.

Espenilla added that the 200bp reduction in bank reserves required helped to send a "credible and concrete signal" to the market.

In its latest report on the Philippines, the International Monetary Fund (IMF) suggested to the central bank stop the new RRR cuts "up to that the inflation is clearly downward and that the Inflationary considerations are better anchored. "

IMF Head of Mission Luis E. Breuer supported the tightening measures of the BSP. Espenilla said the central bank was considering a "strong follow-up" policy adjustment at its 9 August meeting.

However, the PASB leader reaffirmed his commitment to gradually reduce deposit reserves. "This will reduce friction costs in the banking sector, create a more efficient financial intermediation and help curb the parallel bank due to the emergence of strong alternatives offered by FinTech and the Digital innovation ". . "

" The excess liquidity is reabsorbed by our open market operations and our significant foreign exchange operations. The upward trend in market rates confirms the tightening of market conditions. "

The average yields of term deposits offered by the central bank are around 4%, the ceiling of 3-4% for reference interest rates. – Melissa Luz T. Lopez