MANILA (Reuters) – The Philippine central bank kept its benchmark interest rate steady at 6.50% for a second straight meeting on Thursday as price pressures have started to ease, but signaled policy would stay tight for longer to bring inflation back to target.
All but one of the 24 economists in a Dec. 5-11 Reuters poll expected the central bank to leave its target reverse repurchase rate unchanged on Thursday. One predicted a quarter-point hike.
Bangko Sentral ng Pilipinas Governor Eli Remolona told a press conference the central bank deemed it necessary to keep monetary policy settings tight, but was ready to adjust that if necessary.
Annual inflation rose at its slowest pace in 20 months in November at 4.1% versus the previous month’s 4.9%, bringing the average rate over the 11-month period to 6.2%, well outside the central bank’s 2%-4% target.
The central bank lowered its risk-adjusted inflation forecast to 6.0% this year from 6.1%, and to 4.2% next year, from 4.4%.
It said inflation expectations were broadly anchored, mid-term growth prospects were firm and risks to inflation overall were still tilted to the upside.