German lender Deutsche Bank said benign headline inflation rates in the Philippines could allow the Bangko Sentral ng Pilipinas to ease monetary policy by cutting banks’ reserve requirement. In its Asia Economics Monthly report released over the weekend, the bank noted the continued easing of consumer price pressures in June. “If anything, we believe the BSP could use this window of benign inflation to cut the reserve requirement ratio…,” it added. The reserve ratio is the proportion of current deposits that banks need to keep with the Bangko Sentral, against the sum that they can loan out to borrowers. Lastly, Deutsche Bank said further increases in term deposit rates could signal a reserve requirement cut.

Source: Manila Times July 16, 2017 17:15 UTC