• BSP: Fed announcement should calm market

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    The Bangko Sental ng Pilipinas (BSP) on Thursday said that the Federal Reserve’s decision to reduce stimulus to the United States economy should help calm the market.

    US Federal Reserve Chairman Ben Bernanke recently announced that the bank would likely slow down its bond-buying program this year as the US economy is improving.

    “The Fed’s guidance on direction and possible timing of their actions should help calm the markets,” BSP Governor Amando Tetangco Jr. said in a text message to reporters.

    Tetangco also assured the public that the BSP will continue to closely monitor global and domestic developments.

    He added that the central bank will also maintain its strategic presence in the foreign exchange markets. Tetangco also noted that the BSP will continue to assess the situation to determine if there is any need to adjust policy settings.

    “The Fed’s view that the downside risks to their outlook for the economy and labor market have diminished should provide support to domestic growth,” the BSP governor also said.

    On the other hand, Tetangco mentioned that inflation remains manageable despite the picky horizon.

    The BSP’s target for inflation rate for the year is at 3 percent to 5 percent.
    “We will make policy adjustments as and when needed,” he said.

    Last week, the Monetary Board decided keep the current key policy rates. Interest rates for the overnight borrowing or reverse repurchase facility is at 3.5 percent, while overnight lending or repurchase is at 5.5 percent.

    Mayvelin U. Caraballlo

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