PH central bank keeps key rates unchanged; raises 2015 inflation forecast

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The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) kept its key interest rates unchanged but adjusted upward its inflation forecast for this year.

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The BSP now projects inflation for full-year 2015 at 2.3 percent, up from a previous forecast of 2.2 percent. For 2016, it raised its forecast to 2.6 percent from 2.5 percent.

In a press briefing after the meeting on Thursday, BSP Deputy Governor and Officer in Charge (OIC) Diwa Guinigundo told reporters that the latest baseline forecasts continue to indicate that inflation is likely to settle within the lower half of the 3 percent plus or minus 1 percentage point for both 2015 and 2016.

For its key policy stance, the BSP kept the rate for overnight borrowing, or reverse repurchase (RRP) facility at 4 percent, while that for overnight lending or repurchase facility stays at 6 percent.

The special deposit account (SDA) rate was also frozen at 2.50 percent, while the reserve requirement ratio (RRR) for banks still stands at 20 percent.

MAYVELIN U. CARABALLO

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