The Monetary Board approved a further reduction in the BSP’s policy rates for the fourteenth time during the year effective Monday, 17 May 1999. The RRP rate and the RP rate will be reduced by another 2.5 basis points to 10.0 percent and 12.0 percent, respectively, from their previous levels of 10.125 percent and 12.125 percent. This move brings the cumulative reduction in both the RRP and RP rates since the start of the year to 337.5 basis points from 13.375 percent and15.375 percent, respectively.
The reduction in BSP’s policy rates is consistent with the continued downtrend in the 91-day treasury bill rate and signifies the monetary authorities’ commitment to encourage a further decline in interest rates. This is expected to stimulate the resumption of credit growth and hasten the recovery of the real sector consistent with the national government’s growth objectives for the year.