British financial giant Standard Chartered Bank said Wednesday the Monetary Board of the Bangko Sentral ng Pilipinas will likely keep the record-low policy rate of 2 percent for the rest of the year until 2022, as inflation rate is expected to moderate in the coming months.
Chidu Narayanan, Standard Chartered Bank economist for Asia, said in a report for its meeting today he expects the BSP to keep the policy rate unchanged.
“Inflation has plateaued in the second quarter after spiking sharply in the first quarter, as the imposition of nationwide lockdowns impacted activity, hurting demand,” Narayanan said.
“We expect inflation to ease in the second half as the low base from 2020 fades; this should provide BSP with space to maintain easy monetary policy, at least through the rest of 2021,” he said.
Due to stable food prices, inflation remained steady at 4.5 percent for the third successive month in May 2021, after posting a 26-month high of 4.7 percent in February 2021.