Question & AnswerQ&A (BSP CIRCULAR LETTER)
The BSP Circular Letter dated March 30, 2000, pertains to the liquid asset cover for foreign exchange liabilities in the Foreign Currency Deposit Units (FCDUs).
Monetary Board Resolution No. 370 dated March 10, 2000 serves as the basis for the BSP Circular Letter regarding liquid asset cover for FCDU foreign exchange liabilities.
The "Due from BSP-FCDU" account with maturity of one (1) year or less was included as among the eligible liquid asset cover for foreign exchange liabilities in the FCDU.
Yes. The deposit must not be encumbered or utilized for any other purpose to qualify as liquid asset cover.
Deposits or placements in the "Due from BSP-FCDU" account must have a maturity of one (1) year or less.
BSP Circular Letters dated June 6, 1997, and December 24, 1997 are referenced as prior enumerations of liquid assets eligible for compliance.
The requirement seeks to ensure that FCDUs maintain sufficient liquid assets to meet their foreign exchange liabilities promptly and to support financial stability.
The BSP Circular Letter specifically applies to the Foreign Currency Deposit Units (FCDUs) of banks.
FCDU stands for Foreign Currency Deposit Unit.