BSP keeps rates unchanged amid rising inflation concerns

The Bangko Sentral ng Pilipinas (BSP) kept its key policy rates unchanged on Thursday, maintaining them at record lows to support economic recovery amid concerns over rising inflation and the Omicron variant.

Headline inflation eased to 4.2% in November from 4.6%, but Fitch Solutions predicts a gradual tightening of monetary policy by mid-2022 with interest rates expected to reach 2.75%.

The Monetary Board revised its inflation forecasts upward for both 2021 and 2022, citing potential supply-side pressures and global demand constraints.

BSP Governor Benjamin Diokno emphasized the need to sustain monetary policy support while monitoring future risks to inflation.