Philippine central bank on Thursday decided to keep its key policy rates unchanged as expected, but lowered the interest rates on Special Deposit Account (SDA) facility by half-a-percentage point, citing manageable inflation pressures and robust domestic growth prospects.
The Bangko Sentral Ng Pilipinas kept its benchmark overnight borrowing or reverse repurchase rate at 3.5 percent. The rate on overnight lending or repurchase facility was maintained at at 5.5 percent. The bank also kept the reserve requirement ratios unchanged.
Meanwhile, the Monetary Board lowered the interest rates on the SDA facility by 50 basis points to 2 percent, with immediate effect, following a similar reduction at the previous meeting.
The central bank noted that the risks to inflation outlook remained evenly balanced, and assessed that the inflation environment is likely to remain manageable over the policy horizon, with expectations firmly anchored within the inflation target band. The projected inflation path continues to be at the lower half of the 4-1 percent target range for 2013 and 2014.
Policymakers, meanwhile, cautioned that uncertainty over the strength of the global economy and the relative firmness of the peso are the key downside risks to the broad outlook for prices.
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