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What is the primary purpose of monetary policy?
To adjust liquidity to spur or curb economic growth, primarily through interest rates, reserve requirements, and government bond holdings.
Who has the sole authority to issue currency in the Philippines?
The Bangko Sentral ng Pilipinas (BSP) as per the New Central Bank Act.
What is the Manual of Regulations for Banks (MORB)?
It serves as the principal source of banking regulations issued by the Monetary Board and the Governor of the Central Bank of the Philippines.
What are central banks entrusted with regarding monetary policy?
Formulating and executing monetary policy, which involves regulating the money supply, interest rates, and credit conditions.
Describe the currency management role of central banks.
Central banks exclusively issue currency and manage the country's monetary base, ensuring an adequate supply of currency while upholding its integrity and security.
What is the role of central banks during financial crises?
They act as lenders of last resort, providing emergency liquidity support to banks and financial institutions.
What is the exchange rate?
The price of a unit of foreign currency in terms of the domestic currency.
How does the balance of trade affect currency exchange rates?
Higher demand for a currency from exports increases its value, while more imports decrease demand and can lower its value.
What is one tool the BSP uses to stimulate economic activity during a recession?
Lowering interest rates to encourage borrowing and spending.
What is the vision of the Bangko Sentral ng Pilipinas (BSP)?
To be recognized globally as the monetary authority and primary financial system supervisor that supports a strong economy and promotes a high quality of life for all Filipinos.
List one responsibility of the Bangko Sentral ng Pilipinas.
To supervise the operations of banks and exercise regulatory and examination powers over financial institutions.
What does the BSP manage to preserve the Philippine Peso's international stability?
Foreign currency reserves.
What is a function of the BSP related to liquidity management?
Formulating monetary policy aimed at influencing money supply to maintain price stability.
