Monetary Board cuts BSP key policy interest rates by 0.25%

The Monetary Board of the Bangko Sentral ng Pilipinas decided Thursday to reduce the BSP's key policy interest rates by 25 basis points to 3.50 percent for the overnight borrowing, or reverse repurchase (RRP), facility and 5.50 percent for the overnight lending, or repurchase (RP), facility. This fourth cut brings the total reduction in BSP policy rates for 2012 to 100 basis points, or one percent. The Board reduced the policy rates after assessing as "benign" the inflation environment, forecasting inflation from 2012 to 2014 as remaining within expectations, despite the continuing "tepid" global financial conditions. According to the Board, risks to inflation include higher global grain prices and pending upward power rate adjustments, but "subdued" global demand for commodities could moderate international prices. "[T]he Monetary Board is of the view that monetary easing consistent with a manageable inflation outlook will help buffer domestic demand against ongoing global economic strains," it said. — BM, GMA News