BSP cuts policy rates by 25 basis points to 4%
September 26, 2019
The Bangko Sentral ng Pilipinas ( BSP) on Thursday cut the interest rate on the overnight repurchase facility by 25 basis points to four percent.
The reduction takes effect on September 27, said BSP Governor Ben Diokno in a televised press conference.
The interest rates on overnight deposit and lending rates were also reduced to 3.5 percent to 4.5 percent. This is the third rate cut by the BSP this year.
The Monetary Board’s decision is based on its assessment that price pressures have eased further since the previous meeting.
Latest baseline forecasts of the BSP continue to indicate that inflation is likely to settle within the lower half of the target band of 3.0 percent ± 1 percentage point for 2019 up to 2021.
Inflation expectations also remain well-anchored within the inflation target range based on the BSP’s survey of private sector economists.
The Monetary Board also noted that balance of risks to the inflation outlook have shifted toward the upside for 2020, while it is seen to tilt to the downside for 2021.
Upside risks to inflation over the near term emanate mainly from volatility in oil prices due to geopolitical tensions in the Middle East and from the potential impact of the African Swine Fever outbreak on food prices.
Meanwhile, the subdued pace of global economic activity continues to temper the inflation outlook. DMS
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