The Philippine central bank maintained its key interest rate for the twelfth consecutive month as economic conditions and manageable inflation outlook provide space to keep monetary policy unchanged.
The Monetary Board of the Bangko Sentral ng Pilipinas decided to hold the overnight borrowing or reverse repurchase facility at 4 percent. The decision came in line with economists’ expectations.
The overnight lending or repurchase facility was also kept at 6.00 percent. The bank also maintained the reserve requirement ratios.
Policymakers observed that domestic demand conditions continue to be buoyant, supported by solid private household and capital spending, positive business sentiment, and adequate credit and domestic liquidity.
The Monetary Board’s assessment of manageable inflation outlook and robust growth conditions continue to support keeping monetary policy settings unchanged, the bank said.
The bank expects the average inflation to settle within the 2-4 percent target in 2016-17, while inflation expectations continue to be firmly anchored within the goal over the policy horizon.
Looking ahead, the central bank will be in little hurry to adjust interest rates, Gareth Leather, a senior Asia economist at Capital Economics, said. He expects inflation to average 2 percent this year, which is at the bottom of the BSP’s target range.
The material has been provided by InstaForex Company – www.instaforex.com