BSP eyes other tools to counter external links

Bangko Sentral ng Pilipinas (Central Bank of the Philippines). Wikipedia photo

MANILA — The Banko Sentral ng Pilipinas is eyeing to deploy other financial tools against external links.

As investors, in search for better profits, are rebalancing their portfolios, BSP Governor Armando M. Tetangco Jr. said that the central bank is keeping an eye on possible risks to financial stability.

“But at the same time, we are also cognizant that policy rate adjustments may not necessarily be the best tool to address any brewing financial stability pressures, especially at a time when the inflation outlook remains well-anchored as it is for the Philippines right now,” Tetangco said in a Philippine Star report.

“The BSP will continue to monitor global and domestic developments to assess which of the instruments in our tool kit would be most effective should these pressures become persistent,” he added.

The central bank has maintained a steady policy rates for the third time in February and is set to revisit its policy settings again on March 26.

Since last month, BSP has maintained a steady overnight borrowing and overnight lending rates owing to the fall of the inflation expectations within target ranges this year and the next.

“The negative yields in the short-end of the Eur (euro) curve have pushed investors to the long end of the Eur yield curve, as well as the long-dated bonds of economies with good growth prospects, including the US and EMEs (emerging markets and economies),” Tetangco said.