Economists see BSP maintaining low rates until mid-2022

An economist predicts that the Bangko Sentral ng Pilipinas (BSP) will maintain key interest rates steady until mid-2022 to support economic recovery from the pandemic.

Inflation in June decelerated to 4.1%, but remains above the government's target band of 2-4% for this year.

Nicholas Mapa, ING Bank Manila senior economist, notes that despite inflation breaching targets earlier this year, the BSP is likely to keep its accommodative stance due to economic challenges and fading price pressures.

Michael Ricafort, RCBC chief economist, agrees that the BSP's low overnight reverse repurchase rate of 2% will remain unchanged as the economy needs continued support for recovery from pandemic-related lockdowns.