Philippine central bank maintains interest ratesSouce:Xinhua Publish By Jane B. Hatcher Updated 26/04/2013 1:13 am in Business / no comments
MANILA, April 25 — The Philippine central bank on Thursday decided to keep benchmark interest rates at their current level citing manageable inflation.
The Bangko Sentral ng Pilipinas (BSP), however, slashed interest charged on special deposit account (SDA) by 50 basis points to 2 percent in its bid to contain the peso’s strength.
Following its policy setting meeting on Thursday, the BSP kept benchmark interest rates at record-lows of 3.5 percent for overnight borrowing and 5.5 percent for overnight lending.
BSP officer-in-charge Nestor Espenilla Jr. told reporters that this move was based on an assessment that inflation will remain ” manageable” for 2013 and 2014.
Inflation is seen to settle at 3.2 percent this year and 3.4 percent next year, well within the 3-5 percent inflation target set by the BSP.
Meanwhile, the reduction in interest charged on SDA is the third cut for 2013, bringing total cuts to 150 basis points.
“The focus of the Monetary Board was more on pushing funds to the real sector so that more and more economic activities will be funded,” said BSP Deputy Governor Diwa Guinigundo.