BSP's Tetangco sees near-term volatility in domestic markets

Despite the relatively small exposure of the Philippines in Britain, the Bangko Sentral ng Pilipinas sees near-term volatility in domestic markets as a result of the Brexit victory.

At the same time, there is no need to for the central bank to tweak its policy stance on account of the landmark development in the history of the European Union.

Britain has voted to leave the European Union, results from Thursday's landmark referendum showed, an outcome that sets the country on an uncertain path and deals the largest setback to European efforts to forge greater unity since World War Two, Reuters reported on Friday.

"We can expect more volatility in domestic markets in the near term, even as the direct Philippine exposure to UK is relatively small," BSP Governor Amando Tetangco Jr. said in a text message to reporters.

"But we don't see any need to change the stance of the monetary policy at the moment," Tetangco emphasized.

The British vote to leave the European Union sent sterling plunging and hammered equities across the world as turmoil swept through global markets, Reuters noted in a separate report.

In another text message, BSP Deputy Governor Diwa Guinigundo said the Brexit victory is driving sharp volatilities in both the equities and foreign exchange markets.

"UK seems to lose sight more than $575 billion of annual trade between UK and the EU, as well as financial trade across the channel," Guinigundo noted.

Tetangco noted, however, that the central bank is ready to provide local markets with liquidity needed.

"We are therefore closely monitoring the FX market and we remain prepared to act in order to ensure orderly transactions and smooth wild volatility," Guinigundo said. – Ted Cordero/VDS, GMA News