Bangko Sentral gets 'ahead of the game' with surprise rate cut: economist

ABS-CBN News

Posted at Jun 26 2020 09:39 AM

Bangko Sentral gets 'ahead of the game' with surprise rate cut: economist 1
Bangko Sentral ng Pilipinas’ (BSP) new governer, Benjamin Diokno at work shortly after an interview with Cathy Yang for ANC’s The Boss, held at the BSP headquarters in Manila on March 12, 2019. George Calvelo, ABS-CBN News/File

MANILA - The Bangko Sentral ng Pilipinas' surprise cut in the benchmark interest rate would help ensure economic growth as coronavirus lockdowns gradually ease, an economist said Friday.

The BSP on Thursday the reduced rate used by banks to price loans by 50 basis points, bringing it to a record low of 2.25 percent.

"It looks like they want to get ahead of the game, get ahead of the curve and ensure that conditions are conducive enough for growth to pick up when lockdowns are continued to be removed and activities start to pick up again," Standard Chartered Asia economist Chidu Narayanan told ANC.

Narayanan said the BSP could cut reserve requirement ratio for banks by another 200 basis points towards the end of the year, to support additional borrowings if needed.