By Joann Santiago
MANILA, Dec 9 (PNA) — Further deceleration of the country’s inflation rate made Rizal Commercial Banking Corporation (RCBC) President and Chief Executive Officer (CEO) Lorenzo Tan forecast that monetary officials will keep the central bank’s rates steady this week.
He explained that the central bank’s policy-making Monetary Board (MB) is widely expected to maintain the Bangko Sentral ng Pilipinas’ (BSP) policy rates when it meets on Thursday following the decline of November 2014 inflation rate to 3.7 percent.
The inflation rate last November is lower than month-ago’s 4.3 percent due to slower inflation rate of food and non-alcoholic beverages, among others.
This brought the 11-month inflation rate average to 4.3 percent, within the central bank’s three to five percent target for this year.
Tan also noted that the slowdown of inflation rate was accompanied by the drop in global oil prices to a five-year low, which resulted to similar trend in the prices of basic commodities like food and energy.
“M3 or domestic liquidity growth eased further to 15.4 percent (in October 2014), the slowest since April 2013 that could also support keeping current monetary policy settings for now,” he added.
To date, the BSP’s overnight borrowing rate is at four percent and the overnight lending rate is at six percent.
These were increased by a total of 50 basis points this year to partly address the sustained rise of inflation rate in the earlier part of the year and keep the rate of price increases in the next two years within-target.
The government’s inflation rate for 2015 is a range between two to four percent. (PNA)