BSP keeps interest rates at 4.75 percent on lower inflation

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Metro Manila (CNN Philippines, December 13) — The Bangko Sentral ng Pilipinas (BSP) has kept key rates unchanged, ending five consecutive hikes this year amid lower prices of widely-used goods.

The central bank on Thursday announced the policy rate is steady at 4.75 percent, while the interest rates on overnight lending and deposit facilities were also unchanged.

The BSP's policy-making Monetary Board said the "latest inflation forecasts show a lower path over the horizon, with inflation settling within the target band."

"Recent headline inflation readings indicate signs of receding price pressures as constarints on food supply continue to ease with the implementation of various non-monetary measures," it said in a statement.

The central banked added the risks to the inflation outlook "have become more evenly balanced for 2019 and leans toward the downside for 2020 amid a more uncertain global economic environment, which could further mitigate upward pressures from commodity prices in the coming months."

The BSP raised interest rates beginning May this year in a bid to temper rising prices. Inflation had risen since January until it slowed down in November.

The BSP also adjusted downward its inflation projections for 2018 to 2020. It now expects inflation to hit 5.2 percent from 5.3 percent this year, 3.18 percent from 4.3 percent in 2019, and 3.04 percent from 3.3 percent in 2020. The inflation target is 2 percent to 4 percent.