PHL monetary policy independent from US Fed —BSP chief

As the Federal Reserve is expected to impose one more interest rate hike this year, the Bangko Sentral ng Pilipinas (BSP) is unlikely to follow the US central bank's monetary policy adjustments.

"Our monetary policy is independent of what Fed does. We're not obliged to follow since we don't have fixed exchange rate," BSP Governor Nestor Espenilla Jr. said in a text message to reporters.

A fixed exchange rate is a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency or to the price of gold, according to Investopedia.

"Instead, our primary focus is on the inflation outlook relative to our target," Espenilla said.

The central bank chief made the statement after the Federal Reserve released the minutes of its October 31 to November 1 policy meeting, wherein policymakers saw a high probability of a 25 basis point increase in its December meeting.

During its policy-setting meeting on November 9, the BSP's Monetary Board chose to keep its key policy rates unchanged anew. 

It retained the overnight lending rate at 3.5 percent, the overnight borrowing rate at 3.0 percent, and the overnight deposit rate at 2.5 percent.

The prevailing policy rates have been in place since June 2016 when the BSP adopted an interest rate corridor system.

The Monetary Board made the decision based on its assessment that the inflation environment remains manageable. — MDM, GMA News