Ideally, the outcome of this exercise will need little or no adaptation to comply with the final specification of the SSM balance sheet assessment. Liquidity, operating margins and loan-losses on such non-mortgage parts of the banks’ assets as commercial real estate and SME lending will all be important and very material elements of this exercise.
For one, the benign inflation environment affords the BSP the flexibility to fine-tune policy settings, as necessary, to support the domestic economy. The emerging estimates over the policy horizon continue to show within-target inflation. Therefore at this time, policy settings appear to continue to be appropriate. Even as inflation is within our comfort zones, we have it at the front burner.