MANILA (Reuters) – The Philippine central bank’s decision to keep its key policy rate steady was its way of hedging against global uncertainties, its governor said on Friday.
The Bangko Sentral ng Pilipinas unexpectedly kept its key interest rate steady on Thursday, citing uncertainties over global trade policies, but said rate cuts of at least 50 basis points were still likely this year.
Speaking to CNBC, Governor Eli Remolona said the central bank did not want to put itself in a situation where it would have to reverse itself.
“The uncertainty itself about what’s going on is a factor. And so we thought we needed more time to deepen our analysis,” Remolona said.
“We’re hedging so that we don’t find ourselves in a situation where we have to reverse ourselves. We want to stay on an easing trajectory,” he said.
U.S. President Donald Trump announced higher tariffs on steel and aluminium imports this week, along with plans for reciprocal tariffs on countries that impose duties on U.S. goods, escalating the risk of a multi-front trade war.
(Reporting by Mikhail Flores; Editing by Muralikumar Anantharaman and Tom Hogue)
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