MANILA, Jan 11 (Reuters) – The Philippine central bank chief said on Wednesday it was too early to say whether monetary authorities will pause raising interest rates this year, though he said upcoming hikes will not be as large as they were previously.
In comments to reporters, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla at the same time ruled out rate cuts in the near term.
“Monetary policy is responding to inflation. It is not causing inflation,” Medalla said, speaking on the sidelines of a business forum.
“I am ruling out (rate) cuts in the very short run. But I am not ruling out the increases. But maybe the increases will not be as large as it used to,” he said.
He also said the likelihood of the BSP not doing anything on monetary policy in its next two policy meetings was “quite low”.
On Tuesday, he confirmed rates would likely need to rise a further 25 or 50 basis points at next month’s policy meeting, though said pressure to match hikes by the US Federal Reserve was waning.
The BSP, which raised its benchmark interest rate by a total of 350 basis points last year, as inflation hit a 14-year high, will hold its first policy meeting of the year on Feb. 16.
(Reporting by Neil Jerome Morales; Editing by Ed Davies)