The Bangko Sentral ng Pilipinas (BSP) on Thursday raised rates by 25 basis points.
MANILA -- The Bangko Sentral ng Pilipinas on Thursday raised its benchmark target reverse repurchase rate by 25 basis points in a bid to tame inflation.
Remolona said the central bank "fell a little bit behind" when it kept rates steady at 6.25 percent in September despite inflation quickening to 5.3 percent in August. Inflation further quickened to 6.1 percent in September. "That’s very worrisome to us, because as you know, monetary policy cannot control supply-side price shocks, but it can serve to break the link between those supply-side shocks and expectations. And also the link between those supply side shocks and second-round effects, including for example transportation hikes and minimum wage increases," he explained.
"I think beyond July, we will head back towards the middle of the target range, somewhere around 3 percent, and we’ll stay around that region for the rest of the year," he added.
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