Philippines central bank could either hike interest rate by 25 points

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Philippines central bank could either hike interest rate by 25 points

The central bank could either hike the key interest rate by 25 basis points bps or keep policy settings unchanged at its next meeting on Thursday, according to MANILA Philippine Finance Secretary Benjamin Diokno. Diokno, who sits in the central bank's policy-making monetary board, expressed optimism that inflation will fall to around 4 per cent by the end of the third quarter.

The option is not to hike or hike by 25 bps, said Diokno at a forum organised by foreign correspondents.

Philippine inflation fell slightly to 8.6 per cent in February from 8.7 per cent in January, slowing down for the first time in six months on lower transport and food prices, but still well outside the 2 per cent-4 per cent target band for the year.

The Bangko Sentral ng Pilipinas has raised rates eight times for a total of 400 basis points since last year to curb inflation, bringing the overnight reverse repurchase facility rate to 6.0 per cent, the highest since 2007.

Diokno said he would not be surprised if the central bank cut banks' reserve requirement ratio to a single-digit level from the current 12 per cent by the end of the year.