BSP cuts reserve requirements for banks
MANILA -Starting June 30, the reserve requirement ratios (RRRs) imposed on banks will be reduced to coincide with the expiration of alternative modes of compliance with such requirements, according to the Bangko Sentral ng Pilipinas (BSP).
The RRR will decrease by 250 basis points (bps) for universal and commercial banks (U/KBs) and non-bank financial institutions with quasi-banking functions (NBQBs); 200 bps for digital banks, and by 100 bps for thrift banks, rural banks, and cooperative banks.
This will bring the RRRs of U/KBs and NBQBs to 9.5 percent, digital banks to 6 percent, thrift banks to 2 percent, and rural and cooperative banks to 1 percent.
Reserve requirement is the amount of funds that a bank is required to hold in reserve to ensure that it will be able to meet liabilities in case of withdrawals. It is also used by the central bank as a tool to increase or reduce money supply in circulation and influence interest rates.
The BSP said in a statement this move would help ensure stable domestic liquidity and credit conditions.
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