The central bank’s rediscount rate has been lowered to reflect the latest adjustment in the benchmark interest rates.

“The rediscount rate for loans under the peso rediscount facility has been set at 2.75%, regardless of loan maturity (i.e., 1 to 180 days) effective June 26,” the Bangko Sentral ng Pilipinas (BSP) said in a statement Friday.

The 2.75% rediscount rate reflects the record low lending rate of 2.75% after the BSP reduced key policy rates by another 50 basis points Thursday.

Overnight reverse repurchase as well as deposit rates were likewise trimmed to 2.25% and 1.75%, respectively.

The temporary reduction of the term spread on peso rediscounting loans relative to BSP’s overnight lending rate to zero will be effective until July 17 and form part of the central bank’s economic relief efforts. It is subject to changes by the Monetary Board.

The BSP rediscount facility allows banks to access additional liquidity by pledging their collectibles as collateral.

Banks may use the fresh cash – in peso, dollar or yen – to grant more loans for corporate or retail clients and service unexpected withdrawals. — Luz Wendy T. Noble