Bangko Sentral ng Pilipinas Governor Benjamin Diokno sees the level of reserve requirement ratios of banks falling to a single digit at the end of his term.
At the sidelines of the launch of new generation banknotes held at the Bangko Sentral on Wednesday, Diokno said the reserve requirements at the current 16 percent remained high.
“… Single digit… I can’t tell you if it is 5 or 7 or 9 percent. Right now it is 16 percent… It is really high,” Diokno said. His target of a single-digit level in RRR was the same as that of the late BSP Governor Nestor Espenilla Jr.
He said no violent turbulence so far was recorded in the exchange rate after the latest cut in RRR in May.
“Looking back, it was a smart move to pre-announce the reserve requirement cut so that the banking industry can prepare…,” Diokno said.
The BSP on May 16 cut the RRR of universal and commercial banks by 2 percentage points, or equivalent to about P190 billion in additional peso liquidity to be infused into the financial system.