BSP maintains interest rates on easing inflation
Credit to Author: Eireene Jairee Gomez| Date: Thu, 14 Nov 2019 16:50:34 +0000
THE Bangko Sentral ng Pilipinas (BSP) kept interest rates unchanged, with inflation seen stabilizing for the next two years.
The Monetary Board maintained its overnight reverse repurchase facility at 4.0 percent, while the lending and deposit rates at 3.50 percent and 4.50 percent, respectively, after its seventh policy meeting for 2019 on Thursday.
In a statement, the BSP said the upside risks to inflation in 2020 emanate mainly from the possible impact of African swine fever outbreak on food prices and potential volatility in oil prices amid geographical tensions in the Middle East.
“At the same time, weak global economic prospects continue to temper the inflation outlook, as uncertainty over trade policies weigh down on global economic activity and demand,” the central bank said.
Nevertheless, the BSP said firm private domestic spending and sustained progress in policy reforms will serve as a “buffer against external headwinds.”
“Given these considerations, the Monetary Board believes that prevailing monetary policy settings remain appropriate. This is supported by the benign inflation outlook and a firm outlook for domestic economic growth,” it added.
The Monetary Board, furthermore, is also optimistic the fiscal budget for 2020 will be passed within this year.
In 2018, inflation averaged 5.2 percent, reaching record highs of 6.7 percent in September and October.