THE Bangko Sentral ng Pilipinas’ (BSP) Monetary Board has decided to cut the interest rate on the BSP’s overnight reverse repurchase facility by 50 basis points to 2.25 percent.
The interest rates on the BSP’s overnight deposit and lending facilities were reduced to 1.75 percent and 2.75 percent, respectively.
“The Monetary Board noted that even as economies begin to reopen, the global recovery would likely be protracted and uneven. Hence, there remains a critical need for continuing measures to bolster economic activity and support financial conditions, especially the effective implementation of interventions to protect human health, boost agricultural productivity and build infrastructure,” the BSP said in a statement.
“Given these considerations, the Monetary Board decided that a further reduction in the policy rate amidst a benign inflation environment would help mitigate the downside risks to growth and boost market confidence,” it added.
As a result, the rediscount rate for loans under the peso rediscount facility has been set at 2.75 percent, regardless of loan maturity effective 26 June 2020.
Such considers the Monetary Board’s approval on May 14, 2020 on the temporary reduction of the term spread on peso rediscounting loans relative to the Bangko Sentral ng Pilipinas’ overnight lending rate to zero, until July 17, subject to changes as may be approved by the Monetary Board. (PR)