Wednesday, June 8, 2011

Inflation leaves analysts guessing rates

A. S. O. Alegado
BusinessWorld

AN INFLATION RATE in May that settled at the lower end of the central bank’s 4.5%-5.5% estimate for that month has left analysts guessing on next week’s rate-setting action.
Two banks said they expect the Bangko Sentral ng Pilipinas (BSP) to pause from its two rate hikes last March and May when it meets on June 16, while another believes the fact last month’s inflation rate was the highest in more than a year warrants continued monetary policy tightening.
The central bank has raised key rates twice, so far, this year, by 25 basis points (bps) in each occasion. The last such action, last May 5, raised these rates to 4.5% for overnight borrowing and to 6.5% for overnight lending.

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