BSP seen keeping rates steady for 11th meeting


Posted at Mar 26 2014 08:10 AM | Updated as of Mar 26 2014 04:15 PM

MANILA - The Philippine central bank is expected to keep its policy rate steady at a record low of 3.5 percent on Thursday, but hawkish comments from the governor have reinforced views interest rates may be raised as early as in the second quarter.

Ten out of 12 analysts in a Reuters poll still held the view the central bank would leave the policy rate on hold for an 11th consecutive meeting on March 27 after inflation slightly eased in February.

The two dissenters forecast a 25-basis-point increase for both the policy rate and the short-term special deposit account (SDA) rate to help mop up excess liquidity. One of the 10 expecting no change also said the central bank might raise the SDA rate by 25 bps to 2.25 percent.

On Thursday, Governor Amando Tetangco, in his strongest hint that interest rates may be hiked soon, said "measured" adjustments in monetary policy may be needed even though inflation is expected to stay within target.