Home ›› 31 Jul 2022 ›› Asia Biz
The Philippine central bank expects inflation to fall back to within its 2per cent-4per cent target band next year, from a projected average of 5per cent this year, its governor said on Friday, reiterating that further interest rate hikes this year are possible.
Speaking at a business forum, Bangko Sentral ng Pilipinas (BSP) chief Felipe Medalla said the BSP was set to lower its average inflation forecast for 2023 from 4.2per cent. He did not specify a figure.
Medalla said on Thursday the BSP was ready to use the "full force" of monetary policy measures to combat inflation and support the peso currency after the US Federal Reserve hiked rates further this week by 75 basis points.
Earlier this week, Medalla also signalled the prospect of a rate hike at its Aug. 18 meeting, but possibly not by as much as 75 basis points.
"Maybe, depending on the data, (there will be) more policy rate adjustments even before the end of the year," he said on Friday at a forum organised by the Manila Times newspaper.
"Of course it's also possible not to have them because the data may go one way or the other."
The BSP's key reverse repurchase facility rate (PHCBIR=ECI) is currently at 3.25per cent, after three successive hikes totalling 125 basis points between May and July, including an off-cycle increase of 75 bps on July 14.
Medalla also said the peso-dollar exchange rate will continue to be "flexible" and driven by market forces.
