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Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said inflation in September could be lower by 2.2 percent, lower than the 2.4 percent real rate in August.
According to Diokno, the BSP’s Department of Economic Research (DER) has projected a range from a low of 1.8 percent for September inflation to a high of 2.6 percent. Since December 2019, the inflation rate has remained at the level of two percent.
Diokno, citing DER, said that “lower prices for rice and oil, as well as Meralco’s electricity rates, together with the continued appreciation of the peso, are expected to be the main sources of downward price pressure to the month (and) these could be partially offset by the slightly higher price of LPG. “
“The BSP remains attentive to economic and financial developments, and is ready to take the necessary political actions to ensure the fulfillment of its main mandate of price stability leading to balanced and sustainable economic growth,” he said.
The BSP is expected to continue taking a “no change” policy stance when it meets this week, Thursday, for its sixth of eight monetary policy meetings.
The Monetary Board, to stimulate the recovery of the economy, has so far reduced the policy rate by an accumulated 175 basis points this year, lowering interest rates to 2.25 percent, the lowest in the history of the BSP policy rate.
During its last Monetary Board policy meeting in August, the BSP revised up its inflation forecast for this year to 2.6 percent from 2.3 percent and also raised the projections for 2021 and 2022 to three percent from 2.6 percent. and 3.1 percent from three percent.
The benign inflation environment has allowed the BSP to keep interest rates low, which are already negative in real terms.
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