MANILA • The Philippine central bank left its benchmark interest rate unchanged for the first time in six meetings as inflation pressures eased and the peso strengthened.
The overnight reverse repurchase rate was held at 4.75%, Bangko Sentral ng Pilipinas said in a statement in Manila yesterday, marking the first pause after 175 basis points of increases since May.
“Recent headline inflation readings indicate signs of receding price pressures as constraints on food supply continue to ease with the implementation of various non-monetary measures,” the central bank said.
“Inflation expectations have also steadied given the decline in international crude oil prices and the stabilisation of the peso.”
All 18 economists surveyed by Bloomberg predicted the decision, after inflation slowed to 6% in November from 6.7% in October. Oil and rice prices have eased, while a transport fare hike was rolled back this month.
The central bank cut its inflation forecasts, estimating price gains to average 3.2% in 2019 and 3% in 2020. Its target is for annual inflation to average 2% to 4% until 2020.
While the peso is still down more than 5% against the dollar this year, it’s recovered recently to be among the best performers in emerging markets this quarter.