Bangko Sentral cuts banks’ reserve requirement ratios

I show You how To Make Huge Profits In A Short Time With Cryptos!

The Bangko Sentral ng Pilipinas (BSP) said Friday it will implement a 250-basis-point reduction in the reserve requirement ratios (RRRs) of universal and commercial banks and non-banks with quasi-banking functions (NBQBs) starting Oct. 25, 2024.

It will also reduce the RRR of digital banks by 200 bps and those of thrift banks and rural/cooperative banks (RCBs) by 100 bps.

After the reduction, the RRRs of universal and commercial banks and NBQBs will be 7 percent, down from 9.5 percent; digital banks to 4 percent; TBs to 1 percent; and RCBs to zero.

“The new ratios shall take effect on the reserve week beginning on Oct. 25, 2024 and shall apply to the local currency deposits and deposit substitute liabilities of banks and NBQBs,” the BSP said.

BSP Governor Eli Remolona Jr. earlier said the RRR would further be reduced by next year.

Reserve requirements are the minimum reserves required for depository institutions. They are set by the central bank within limits specified by law. A change in the minimum reserve ratio affects the amount of deposits a financial institution can lend out.

The BSP said the adjustments in reserve requirements are in line with its continuing efforts to reduce distortions in the financial system.

“The reductions will lower intermediation costs and promote better pricing for financial services,” the BSP said.

“As inflation continues to track a target-consistent path over the next two years, the BSP will reassess the need for further reductions in the RRRs to better align them with regional norms over the medium term,” it said.

Be the first to comment

Leave a Reply

Your email address will not be published.


*