MANILA: The Philippine central bank can afford to leave interest rates unchanged for sometime with inflation forecast to settle within target for this year and next, deputy governor Diwa Guinigundo said on Wednesday.
The central bank left its key policy rate steady for a third straight meeting on Feb. 12, with inflation projected to ease below the mid-point of its 2-4 percent inflation target for 2015 and 2016.
"The BSP (Bangko Sentral ng Pilipinas) has adequate room to keep policy settings steady," Guinigundo told a business forum, adding that cutting rates may have a negative impact on inflation, pushing it closer to the high-end of the target range.
Falling inflation should allow the central bank to consider easing monetary policy this year to further boost growth, according to some economists.
But Guinigundo told Reuters in a text message on Wednesday the economy remains robust and does not need additional stimulus, adding the government could step in and provide fiscal stimulus if the economy needed more support
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