Philippines announces new rate corridor

Amando Tetangco at Central Bank of the Philippines
Governor Amando Tetangco at the Central Bank of the Philippines

The Central Bank of the Philippines will introduce a new interest rate corridor on June 3, in a bid to improve the transmission of monetary policy.

Interest rates on new lending and deposit facilities will be set at 3.5% and 2.5%, respectively, set 50 basis points either side of a 3% overnight reverse repurchase rate.

The central bank will also introduce a term deposit facility, which it says will be used to "withdraw a large part of the structural liquidity deficit from the financial system".

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