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BSP Cuts Policy Rates for the 9th Time in 1999

04.08.1999

"For the ninth time in 1999, the BSP reduced its policy rates across-the-board by 37.5 basis points effective Monday, 12 April 1999. This brought down the BSP’s RP rate and RRP rate to 13.375 percent and 11.375 percent, respectively, from their previous levels of 13.75 percent and 11.75 percent, respectively. The said reduction forms part of the package of measures to encourage lending approved by the Monetary Board on 7 April 1999. This move brings the cumulative reduction in both the RP and RRP rates since the start of the year to 200 basis points."

"Other measures in the approved package include the 1.0-percentage point reduction in the liquidity reserve requirements of banks and the relaxation of the application of the present 1.5 percent general loan-loss provision to cover only loans outstanding as of 31 March 1999."

 "The monetary authorities have taken these steps in an environment of falling inflation and continued stability of the peso exchange rate. The measures are expected to encourage banks to assume a more active role in financial intermediation, which will in turn facilitate the expected recovery in the real sector of the economy in 1999."

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