MANILA (Reuters) – The Philippines’ central bank governor said on Thursday the likelihood of cutting reserve requirements for banks in the first half of year is quite high.
The reserve requirement ratio for banks will be reduced when the central bank is no longer under pressure to raise benchmark rates, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla told ANC news channel. “We do not think it’s healthy to have 12% reserve requirement.”
For now, the central bank does not want to confuse the market as it continues with a series of rate hikes to combat elevated inflation, Medalla said.
“If the U.S. is increasing policy rates, we need not match it but if it’s 50 (basis points), it’s hard not to respond, at least partially,” Medalla said.
Monetary authorities last cut its RRR, or the percentage of deposits and deposit substitutes banks must keep with the BSP, by 200 basis points in March 2020.
(Reporting by Neil Jerome Morales; Editing by Ed Davies)
