Philippines central bank may pause or hike rates at next meeting -governor

MANILA (Reuters) – The governor of the Philippine central bank said on Wednesday it could either keep interest rates steady or raise them at its policy meeting next week.

The central bank, which meets for the last time this year on Dec. 14, kept interest rates steady at 6.5% at its meeting in November after an off-cycle 25-basis point hike on Oct. 26, amid worries that inflation could spiral out of control.

“Hawkish means we could either pause or we could hike on December 14,” Bangko Sentral ng Pilipinas Governor Eli Remolona told reporters.

Even as inflation rose at its slowest pace in 20 months in November, at 4.1% versus the previous month’s 4.9%, the central bank said on Tuesday there was a need to keep monetary policy “sufficiently tight until a sustained downtrend” was evident.

Barring supply shocks, Remolona said, inflation could return to the central bank’s 2%-4% target by December, and remain below 3% in the early part of 2024.

Remolona said the central bank will not lower banks’ reserve requirement ratio, currently at 9.5%, while it is still hawkish.

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