BSP ends standstill with 25-bp rate cut

Remolona said headline inflation is projected to trend downward within the government's two to four percent target this year despite the uptick in July.

- KEISHA TA-ASAN

The Bangko Sentral ng Pilipinas (BSP) commenced its easing cycle yesterday, delivering a 25-basis-point (bp) interest rate cut as inflation pressures recede and expectations remain anchored over the policy horizon.

In a press conference following its fifth policy review this year, BSP Governor Eli Remolona Jr. said the Monetary Board decided to lower the target reverse repurchase rate to 6.25 percent from a 17-year high of 6.5 percent.

Likewise, the overnight deposit and lending rates were reduced to 5.75 percent and 6.75 percent, respectively.

"With inflation on a consistent path, the current macroeconomic outlook supports a calibrated shift to a less restrictive monetary policy stance. Nonetheless, monetary authorities remain mindful of lingering upside risks to prices," he said.

The BSP chief said the balance of risks to the inflation outlook continues to lean toward the downside for 2024 and 2025 as forecasts remain well within the two to four percent target.