BSP keeps key rates, raises SDA


The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) held its benchmark interest rates on overnight borrowing and lending facilities steady at its policy meeting Thursday, but raised its rate on the Special Deposit Account (SDA) facility by 25 basis points to 2.25 percent.

BSP Governor Amando M. Tetangco, Jr. said in a statement the decision was based on the assessment that inflation was likely to settle within the upper end of the 3-to-5 percent target band for the rest of 2014, and that raising the SDA rate was seen as a prudent hedge against excess liquidity in the financial system.

Most analysts had expected the Monetary Board to raise both its reverse repurchase (borrowing) and repurchase (lending) rates in response to a trend toward higher inflation in the Philippines, which settled at 4.5 percent in May.

The BSP’s move to hold the rates steady follows that of the US Federal Reserve, which also held firm on its benchmark rates in its policy meeting on Wednesday (Thursday in Manila).


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