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BSP says ready to adjust monetary settings to hit inflation target

Posted on July 24, 2012 11:51:47 AM | BREAKING NEWS

THE CENTRAL bank today said it is ready to adjust its monetary settings to make sure that inflation stays within its target for the year.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., in a text message to reporters, said inflation in July is expected at 2.6%-3.5%, with a strong peso and lower liquefied petroleum gas prices offsetting the increase in utility rates and international oil prices.

"Our current view is there is some scope to to adjust monetary policy settings to protect the inflation target on the downside," Mr. Tetangco said.

Inflation averaged 3% as of June, slightly lower than the central bank's average 3.1% forecast for the year. The BSP targets a 3-5% inflation this year.

The BSP's policy-making Monetary Board will meet on Thursday to reassess monetary settings. The BSP's key rates are presently at 4% for overnight borrowing and 6% for overnight lending.

"Nevertheless, the BSP will continue to monitor developments particularly movements in international commmodity prices, shifts in investor appetite that affect capital flows and any changes in growth prospects across the globe as these would impact on our own domestic price and growth dynamics," Mr. Tetangco added. -- K. A. Martin