BSP keeps policy rates steady

June 20, 2019

The Monetary Board on Thursday decided to keep the interest rate on the BSP's overnight reverse repurchase (RRP) facility unchanged at 4.50 percent.

In a statement by the Bangko Sentral ng Pilipinas (BSP), the board decided on this as latest baseline forecasts indicate that inflation remains likely to settle within the target range of 3.0 percent ± 1.0 percentage point for both 2019 and 2020, while inflation expectations have moderated further.

"A prudent pause allows the BSP to observe and assess the impact of prior monetary  adjustments including the phased reduction in the reserve requirements to be completed by the end of July," the BSP said.

The Monetary Board said the risks to the inflation outlook are broadly balanced for 2019 and 2020.

"Weaker global economic prospects amid a possible easing in global demand and increased trade tensions continue to temper the inflation outlook,'' it said.

The potential  adverse effects of a prolonged El Nino episode remain a key upside risk to inflation, it added. DMS