Thursday, October 20, 2011

Philippines Central Bank Keeps Policy Rate at 4.50%

The Bangko Sentral ng Pilipinas kept its overnight borrowing rate unchanged at 4.50% and the overnight lending rate at 6.50%, and kept reserve requirements unchanged at 21%.  The Bank said: "The Monetary Board's assessment of a manageable inflation environment and subdued economic conditions continues to support current monetary policy settings.  Latest average baseline forecasts show a lower inflation path, consistent with the 3-5 percent target range for 2011-2013, while inflation expectations remain well-contained, supported by easing commodity prices. Domestic economic growth has moderated as the global recovery has slowed down and as domestic public spending has been weaker than expected."

The Philippine central bank also held the rate unchanged at its last meeting, and last raised its interest rate in May this year by 25 basis points to 4.50%, and increased reserve requirements by 100bps at its previous meeting.  The Philippines reported annual consumer price inflation of 4.8% in September, compared to 4.7% in August, 4% in July, 4.7% in June, 4.5% in May and 4.3% in April.  Inflation is currently tracking inside the Bank's inflation target range of 3%-5%.  

The Philippines Peso (PHP) has gained by just over 1% against the US dollar so far this year, with the USDPHP exchange rate last trading around 43.37.  The Philippines central bank next meets to review policy settings on the 1st of December this year.


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