The additional trimming of Bangko Sentral ng Pilipinas' policy rate by 50 bps and the required reserve ratio
(RRR) by 200 bps in second half of the year will 'add fuel to growth --in the real economy and financial markets', they said.
'We have plenty of room in interest rates, we have plenty of room in required reserve ratio
rate, and also for the fiscal, monetary-policy toolkit, I think the room for adjustment is tremendous,' said Yi in an exclusive interview in Beijing.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno pledged to cut interest rates further and lower the required reserve ratio
(RRR) for lenders to support the economy as inflation pressures ease.
'Besides, the room for lowering the required reserve ratio
is limited, and the central bank should be more cautious before taking another cut.'
It cut required reserve ratio
(RRR) by 100 basis points in 2019, largely an extension of 2018's stance when it lowered the ratio by 3.5 percentage points in a one-year span through five separate cuts.
The Bank of Mongolia set the required reserve ratio
to 10.5% for domestic-currency liabilities and 12.0% for foreign-currency liabilities at end-March 2018, with the difference aimed at discouraging dollarisation.
The move will see the required reserve ratio
for some banks drop by 0.5 of a percentage point, effective July 5.
On the other hand, some banking stocks traced a downward trajectory following the Central Bank of Egypt???[c]'s decision to raise the Required Reserve Ratio
to 14% from its current 10%, effective October 10, 2017, a move that is expected to weigh on Egyptian banks???[c]' net interest margins and put downward pressure on their return on equity.
The Required Reserve Ratio
. This is the fraction of its liabilities that a commercial bank is required to hold as reserves with the Bank of England.
In 2012, the CBE allowed lenders to write off an amount equivalent in size to their SME credit facilities from 14% required reserve ratio
(RRR) whilst also reducing RRR from 14% to 12%, freeing up liquidity to be direct to the SME sector.
Deepening liquidity problems mean that more active steps to ease the strain on the domestic banking system are likely, including a cut in the repo rate and a reduction in the required reserve ratio
However, banks have been able to find funding abroad, and we believe that the Qatar Central Bank (QCB) has at its disposal the tools to support liquidity, with the QCB's repo rate and required reserve ratio
both above four per cent.