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MANILA, Philippines – The Philippine central bank said Friday, January 24, there are “no signs” it needs to raise interest rates and forecast a fall in inflation in 2015 after a possible uptick this year.
Inflation was at a two-year high of 4.1 percent according to figures released in December – largely due to an increase in food prices as a result of the widespread destruction caused by Super Typhoon Yolanda (Haiyan).
The central bank said the effects of the disaster caused a surge in inflation at the end of 2013 but added this effect was likely to be short-lived.
It said the average inflation rate for 2013 was 3.0 per cent, and admitted this could rise this year, predicting a range from 3.0 to 5.0 percent.
This figure is expected to drop to between 2.0 and 4.0 percent in 2014, the central bank added.
“Prevailing inflation and output conditions suggest that monetary policy settings are appropriate,” with no signs that an interest rate hike is needed, the bank said in a statement.
The central bank has kept its key overnight borrowing and lending rates at 3.5 and 5.5 percent respectively, after lowering them to those levels in October, 2012.
Government economic planners earlier said that the Philippine economy is estimated to have grown by 7.0 percent in 2013 and will grow by 6.5 to 7.5 percent this year. –Rappler.com