Its operational variable in this process is the level of short-term interest rates. The level of interest rates is determined primarily by total saving in the economy, the inflow of capital, and by the demand for funds from government, businesses and private individuals. The central bank affects the cost of short-term funds through the impact of its actions on the repo rate, i.e.
Nevertheless, while the Bangko Sentral is open to innovations, it continues to be prudent as the agriculture sector has its own unique intricacies and risk profile. Accordingly, we have set in place certain parameters to ensure that risks associated with agriculture finance are properly managed. There is also growing interest in providing housing microfinance and even micro-insurance, using microfinance methodologies and technologies.