Philippine central bank keeps key policy rate unchanged

Xinhua News Agency | Oct 1, 2020 at 2:19 PM

MANILA, Oct. 1 (Xinhua) -- The Philippine central bank decided on Thursday to maintain the interest rate on the bank's overnight reverse repurchase (RRP) facility at 2.25 percent.

The Bangko Sentral ng Pilipinas (BSP) also said that 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 remain appropriate," BSP Governor Benjamin Diokno told a virtual media briefing.

The 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," he said.

At the same time, he said the Monetary Board "observed encouraging signs of recovery in domestic economic activity," supported by ample liquidity in the financial system.

Given these considerations, he said 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."

"The gradual easing of restrictions, along with sustained efforts by the government to protect human health and livelihood, should also help lift market sentiment and aid the recovery of the economy in succeeding months," he added.

Looking ahead, Diokno said the BSP stands ready to deploy its full arsenal of instruments as needed in fulfillment of its mandate to maintain price and financial stability conducive to sustainable economic growth.