The Philippine central bank kept its key interest rates unchanged on Thursday after shifting to interest rate corridor system early this month.
The Monetary Board of the Bangko Sentral ng Pilipinas decided to keep the overnight reverse repurchase rate at 3.00 percent and the overnight lending rate at 3.50 percent.
The reserve requirement ratios were likewise left unchanged.
The central bank had reduced the reverse repurchase rate to 3 percent from 4 percent when it shifted to an interest rate corridor system on June 3.
The upper bound of the corridor is the overnight lending facility at 3.5 percent and the lower bound is the overnight deposit rate at 2.5 percent, thus having a width of 100 basis points.
Looking ahead, Gareth Leather at Capital Economics thinks the central bank will be in little hurry to adjust interest rates.
Inflation is forecast to settle near the lower edge of 2 percent to 4 percent target range in 2016 and rise toward the mid-point of the target range in 2017 and 2018. With global oil prices recovering, the risk of second-round effects from lower oil prices is likely to recede in the period ahead, the bank said.
Further, the bank observed that domestic economic activity continues to be firm, supported by solid private household consumption and investment, buoyant business and consumer sentiment, and adequate credit and domestic liquidity.
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