Schemes to Assist in Easing Y2K-Related Liquidity Pressures

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MAYN HLA PHIPINAS

OFF1CE OF THF G:OVERNOR

CIRCLLAR EETTER

TO : ALI BANKS

SUBJECT : Schemes to Assist in Easing Y:2KRelated Liquidity Pressures

tiquidity pressures in its R:esoluticr: No. 14i83 cated October 15, 1999, as further clarified by its Resolution Nos. 1631 and 1685 dated Nicvember 11, 1999 and November 19, 1999, respectively: The Monetary: Board approved the: followirg schernes to assist in easing Y2K-related

a. To temporarily release to the banks from December 17, 1999 to January 6, 2000 the 25 percent: of statutory reserves- normally required to be deposited with the BSP; b. To temporarily waive the penaities on non-compliance with the liquidity reserve requirement frc:rn December 17. 1999 to january 6, 2000; c. To temporarily lengthen the period of compliance with reserve position to three weeks star~ing December 17, 1599 and ending January 6, 2000; and d. To tower -he reserve requirement cn interbank foans from one percent to zero percent effective Decerber 17, i599, provided, however, that for prudential reasons, only interbank borrowings evidenced by the interbank ioan advice or repayment transier ticke:s and settie: through the respective demand deposits of banks or non-banks witi- quasi-oank ng :unctions with the BSP should be eligible to the zero level af reserve regu rement.

purposes of determining "aiuse" of the privitege of offsetting, as well as chronic reserve deficiency. The three-week pe iod under item (c) above shall be considered as a single week for

This Circular Letter shall take effect imntediately

RAFAEL B. BUENAVENTURA Governor

December 1999

ITAGUYOD.ANG PHILIFPINES 2000 MAG-iMPOK SA BANGKO