No more rate cuts, reserve reductions this year, BSP says

The country’s central bank chief on Monday, Nov. 4, announced a pause in monetary easing in the last two months of 2019 to allow a string of liquidity-injecting policies made in recent weeks to work their way through the economy.

In an interview with the ABS-CBN News Channel, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said “there will be no more policy cuts this year and no more relaxation of the reserve requirement.”

In response to the downtrend in the inflation rate this year, the central bank had reduced its key overnight rate by a total of 75 basis points over several policy meetings of the Monetary Board and authorized a combined 4 percentage point reduction in the amount of cash banks are required to keep immobile in their vaults — the last one being announced only two weeks ago, and meant to take effect early December.

This aggressive monetary policy easing stance was made possible by the steady downtrend in the inflation rate this year, although the central bank expects prices to move slightly higher during the Christmas spending season./TSB