MANILA, Philippines – The Bangko Sentral ng Pilipinas said yesterday it will remain watchful of any impact the European Central Bank (ECB)action has on domestic markets.
“The impact on individual economies and currencies however is likely going to be different and thus, the needed policy responses may also vary. For the BSP, we will include this development in our discussion during our next policy meeting,” BSP Governor Amando M. Tetangco, Jr. said in a text message to reporters.
“In the meantime, we will continue to closely watch out for shifts in global investor sentiment and monitor movements in our own financial markets, and any financial stability pressures that these may bring about,” he added.
The ECB on Thursday cut its benchmark interest rates by 10 basis points to record lows of 0.15 percent, and introduced a number of measures meant to pump money into the euro zone economy.
“This is a clear sign of asynchronicity in the stance of monetary policies of the advanced countries. In a way, this should be favorable from a global liquidity point of view,” Tetangco said.
The ECB also moved to encourage lending to businesses in the euro zone economy through incentives that will be given to banks.
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ECB president Mario Draghi also stressed the central bank will keep inflation rates within levels close to two percent. However, inflation is only seen settling at 0.7 percent this year, 1.1 percent in the next, and 1.4 percent in 2016.
“Concerning our forward guidance, the key ECB interest rates will remain at present levels for an extended period of time in view of the current outlook for inflation,” Draghi said in a statement published at the ECB website.
“Moreover, if required, we will act swiftly with further monetary policy easing. The Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate should it become necessary to further address risks of too prolonged a period of low inflation,” he continued.
