(Bloomberg) -- The Philippine central bank left its benchmark interest rate unchanged for the first time in six meetings as inflation pressures eased and the peso strengthened.
The overnight reverse repurchase rate was held at 4.75 percent, Bangko Sentral ng Pilipinas said in a statement in Manila on Thursday, marking the first pause after 175 basis points of increases since May.
Key Insights
- All 18 economists surveyed by Bloomberg predicted the decision, after inflation slowed to 6 percent in November from 6.7 percent in October
- Oil and rice prices have eased, while a transport fare hike was rolled back earlier in December. The central bank’s target is for annual inflation to average 2 percent to 4 percent until 2020
- While the peso is still down more than 5 percent against the dollar this year, it’s recovered recently to be among the best performers in emerging markets this quarter
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- President Rodrigo Duterte is boosting spending on roads and railways to help shield the economy from the impact of rising prices and higher borrowing costs. Growth eased to 6.1 percent in the third quarter, the weakest since 2015
- See this chart for how fuel prices have declined
--With assistance from Clarissa Batino and Michelle Jamrisko.
To contact the reporters on this story: Siegfrid Alegado in Manila at aalegado1@bloomberg.net;Cecilia Yap in Manila at cyap19@bloomberg.net;Ditas Lopez in Manila at dlopez55@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karl Lester M. Yap
©2018 Bloomberg L.P.
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