It has cut the budget for its
rediscounting facility to the pre-crisis level of PHP20bn (USD450m) from PHP40bn.
Foreign guarantees for loans made in naira are now permitted, while a
Rediscounting and Refinancing Facility (RRF) has been introduced for medium and long term credit, in order to promote lending to non-oil industrial customers.
Reserve Banks, it declared, exist for the purpose of "accommodating commerce and business," a purpose they fulfill by "furnishing an elastic currency" and "affording a means of
rediscounting commercial paper.
A member commercial bank could accommodate an increase in loan demand or currency withdrawals by
rediscounting eligible commercial paper with its Federal Reserve Bank.
The bank said on Thursday that it had created a PHP5bn special
rediscounting window for banks with small business clients who had suffered from the recent typhoons.
Through
rediscounting the Reserve Banks would provide an elastic supply of balances in response to rapid demand shifts, preventing financial panics (White 1983, pp.
When the balance in a central bank's operations account falls below an agreed target level, it is required to restrict credit expansion, generally by increasing the cost to membercountries of
rediscounting paper with the central bank or by restricting member-countries' access to
rediscounting facilities.
The initial regulation provided for
rediscounting short-term agricultural, industrial, and commercial paper, defined as eligible paper.
The liberalised
rediscounting guidelines would enable banks to rediscount more loan papers and therefore, have access to additional funds that they can re-lend to the public.
BOAD's access to the
rediscounting facility of the Central Bank of West African States (BCEAO) makes additional funds available to it.
reserve requirements, regulations governing
rediscounting, open market
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Rediscounting lines of credit to independent factoring companies, and Import-Export Factoring worldwide.