Banks’ RRR slashed by 250 bps | Jasper Y. Arcalas

THE Bangko Sentral ng Pilipinas on Thursday slashed the reserve requirement ratios of banks by as much as 250 basis points, bringing down the effective ratios across banks to single digit, as it seeks to ensure “stable” domestic liquidity and credit conditions.

The reduction in RRRs shall take effect on the reserve week beginning June 30 and shall apply to the local currency deposits and deposit substitute liabilities of banks and NBQBs. The BSP noted that the implementation of the reduced RRR will coincide with its inaugural offering of a 56-day BSP bill, which will serve as an “additional instrument for absorbing system liquidity.”

BSP Governor Felipe M. Medalla earlier signaled that the central bank could slash the RRR before the end of the first half should the inflation print cool down.

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