Philippine monetary officials on Thursday decided to maintain current key policy rates as latest baseline forecasts showed a lower path consistent with the 3 percent to 5 percent inflation target range for 2011 and 2012.
The central bank's overnight borrowing rate still stands at 4. 5 percent while its overnight lending rate remains at 6.5 percent.
But the Monetary Board decided to raise anew the reserve requirement on deposits and deposit substitutes of all banks and non-banks with quasi-banking functions by 1 percentage point starting August 5.
"Philippine bank lending has been growing at double-digit rates since January 2011, supported by the strong momentum of domestic economic activity and stable financial conditions. For this reason, the Monetary Board's decision to raise the reserve requirement anew is a forward-looking move to better manage liquidity," the Board said in a statement.
