11.05.2009 At its meeting today, the Monetary Board decided to keep the BSP’s key policy interest rates steady at 4 percent for the overnight borrowing or reverse repurchase (RRP) facility and 6 percent for the overnight lending or repurchase (RP) facility. The interest rates on term RRPs, RPs, and special deposit accounts (SDAs) were also left unchanged.
In its assessment of the monetary policy stance, the Monetary Board considers the current settings as appropriate. The latest inflation forecasts reflected a slightly higher path, but remained closer to the lower bound of the targets over the policy horizon. Demand-side pressures on consumer prices continue to be limited and inflation expectations well anchored. On the supply side, price pressures from crop losses due to the recent calamities are not expected to have a significant long-lasting impact on inflation. With such flexibility, the Board also believes that keeping the policy rates steady will help support domestic demand, including the reconstruction efforts of the government, and economic activity in the near term.
Going forward, the BSP will continue to monitor the risks to the inflation outlook, which include commodity prices, and will adjust monetary policy settings if needed to achieve its price stability objective. At the same time, the BSP reiterates its support for non-monetary government measures to address supply-side risks to consumer prices. |
