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Central bank remains ready to adjust policy

Posted on September 18, 2013

MONETARY authorities are prepared to adjust policy settings and deploy new measures to address risks to the economy, the Bangko Sentral ng Pilipinas (BSP) chief yesterday said.

“The BSP stands ready to make refinements to existing macroprudential measures or deploy new ones as necessary,” central bank Governor Amando M. Tetangco, Jr. said at a briefing on the economy.

Uncertainties over the timing and pace of a US Federal Reserve tapering have caused emerging markets to stumble. With the Fed expected to finally begin scaling back this week, markets are again expected to react.

“Our approach is to use a set of measures to address the challenges we face particularly from significant flows of capital ... that if not managed properly can lead to asset price bubbles,” Mr. Tetangco explained.

The central bank’s policy-setting Monetary Board last month kept overnight borrowing and lending rates at record lows of 3.5% and 5.5%. Special deposit account rates were also maintained at 2% across all tenors and inflation outlooks were adjusted downwards. -- ARRG