Interest rates remains stable
Interest rates remain at 2.25 percent says Bangko Sentral ng Pilipinas
MANILA – Bangko Sentral ng Pilipinas’ governing body, the Monetary Board, in its meeting today, decided to keep the interest rate on the BSP’s overnight reverse repurchase (RRP) at 2.25 percent.
In a statement, the BSP said the interest rates on the overnight deposit and lending facilities were likewise kept at 1.75 percent and 2.75 percent, respectively.
The Monetary Board’s decision is based on the assessment that prevailing monetary policy settings remains appropriate. Latest baseline inflation forecasts show a slightly lower path within the Government’s 2-4 percent target range.
This reflects the lower-than-expected inflation in August, the moderation in global crude oil prices, and the appreciation of the peso. The balance of risks to the inflation outlook also continues to lean toward the downside from 2020 until 2022 owing largely to the risk of potential disruptions to domestic and global economic activity in the middle of a global pandemic. Inflation expectations remain founded within the inflation target band.
The Monetary Board noted that global economic activity has stabilized in recent weeks. Uncertainty remains elevated with the resurgence of COVID-19 cases in some areas. At the same time, the Monetary Board observed encouraging signs of recovery in domestic economic activity, supported by ample liquidity in the financial system.
With such a scenario, the Monetary Board is of the view that a continued pause will allow prior measures by the BSP to further work their way through the economy. With the gradual easing of restrictions coupled with sustained efforts by the Government to protect human health and livelihood, should also help left market sentiment and aid the recovery of the economy in succeeding months.
The BSP said they stand ready to deploy its full arsenal of instruments whenever needed in fulfillment of its mandate to maintain price and financial stability needed for sustainable economic growth. (Melo M. Acuña)