BSP keeps policy, SDA rates unchanged

MANILA, Philippines – The central bank kept interest rates remain at record lows despite volatile oil prices and peso-dollar exchange rates.

On Thursday, September 12, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) announced it kept policy rates unchanged at 3.5% for overnight borrowing and 5.5% for overnight lending.

Rates on special deposit accounts (SDA), as well as reserve requirement ratios, were also left unchanged.

The yield for special deposit accounts remains the same at 2%. 

The BSP is winding down its SDA facility to compel banks to fund productive activities.

“The Monetary Board’s decision is based on its assessment of a benign inflation environment,” the BSP said in a statement.

BSP lowered the inflation target for 2013 to 3% from 3.3%. It remains on the low end of its target of between 3% to 5%.

Inflation in August fell to its lowest level since August 2009 amid continuing peso depreciation and weather disturbances.

READ: August inflation low despite strong peso, bad weather

“World economic prospects are seen to stay broadly subdued, thus tempering pressures on global commodity prices,” the BSP said. – Rappler.com