No need to be in sync with US Fed: Philippine central bank chief
MANILA (Reuters) – The Philippine central bank’s policy decisions do not have to move in sync with the U.S. Federal Reserve’s action, its governor said on Saturday, as he reiterated the country’s inflation outlook continues to be manageable.
Bangko Sentral ng Pilipinas Governor Amando Tetangco made the comments after Fed Chair Janet Yellen told a global monetary policy conference in Jackson Hole, Wyoming, that the case for a rate increase had grown stronger, and Fed Vice Chair Stanley Fischer suggested a move could come in September if the economy was doing well.
“The BSP (central bank) will not necessarily have to move in sync with the Fed should they indeed hike either in September or December as the Fed chair’s comments indicate that they are getting closer to their next move,” Tetangco said in a mobile phone text message.
Tetangco said policymakers were mindful of near-term financial market volatility that could stem from the Fed’s statement, but it has tools keep sharp swings in check.
The Philippine central bank has not changed its monetary policy stance since a 25 basis point rate hike in September 2014 with the economy in a sweet spot of strong growth and low inflation.
August annual inflation is forecast to settle between 1.6-2.4%, Tetangco said, taking into account higher domestic oil and rice prices and decline in electricity rates.
Inflation was 1.9% in July, unchanged from the previous month. Inflation has stayed below the central bank’s 2-4% target since April 2015 due in large part to low fuel prices and imports of the national staple rice.
“We will continue to monitor developments including changes in tax levies and weather-related disturbances that could impact on domestic prices and demand dynamics and make adjustments to our monetary policy stance as appropriate,” Tetangco said.
(Reporting by Karen Lema; Editing by Simon Cameron-Moore)