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BSP to stay on hold for the rest of 2021

October 18, 2021 - Monday 8:10 PM by GDM

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There will be no rate adjustments coming in the remaining months of the year, according to Bangko Sentral ng Pilipinas Governor Benjamin Diokno, who cautioned on the “harm” of an early rate hike.

“It would appear there won’t be no more policy rate adjustments between now and the end of the year,” Diokno said in an interview with ANC Television on Monday.

There are two more meetings left this year for the Monetary Board to decide on policy settings — one in November and the other in December.

Diokno’s remarks means the Philippines will not join other countries in tightening monetary policy as inflation creeps up. The key rate at home currently stands at historic-low 2%.

Economies like South Korea and New Zealand made their first post-pandemic rate hike, with Singapore following suit just last week.

According to Diokno, an early rate hike while the economy still needs support to recover would do more harm than good.

“I’ve made that very clear that the harm from early monetary tightening exceeds the harm of moving too late,” the BSP chief said.

“We’re fairly comfortable we don’t need to raise interest rates at this time,” he added.