MB LEAVES POLICY RATE UNCHANGED

The Monetary Board decided to maintain its policy rate, the interest rate on the BSP’s overnight reverse repurchase (RRP) facility, steady at 3.0 percent. The corresponding interest rates on the overnight lending and deposit facilities were also kept unchanged. The board’s decision is based on its assessment that while recent inflation outturns show an elevated path in 2018, the latest baseline forecasts continue to show inflation remaining within the inflation target in 2018 and moderating further in 2019. The board also considered that prospects for domestic activity continue to be firm on the back of robust domestic demand, strong growth in credit and liquidity, and a sustained recovery in global economic growth. The Monetary Board also observed that the risks to the inflation outlook remain weighted toward the upside owing mainly to price pressures emanating from pending petitions for adjustments in minimum wages and transportation fares. It also noted that inflation expectations have started to rise and need to be monitored. /