BSP cuts bank reserves for a second time this year
The central bank is introducing yet another reduction in reserve requirements.
Bank reserves will be down to 18 percent effective June after the Monetary Board approved another one percentage point cut in reserves.
The Bangko Sentral ng Pilipinas (BSP) made the announcement on Thursday, May 24. This is the second time when the central bank cut the reserve requirement ratio for big banks following a first reduction in March.
“The reduction in reserve requirements is also part of the BSP’s broad financial sector reform agenda to promote a more efficient financial system by lowering intermediation costs,” the central bank said in a statement.
“Moreover, the Monetary Board reiterates that the calibrated reductions in reserve requirement ratios are not intended to signal any change in the prevailing monetary policy stance, as the BSP continues to have the scope to offset their potential liquidity impact via an expansion in auction-based monetary operations.”
This comes after a rate hike from the BSP in early May.