MANILA : The Philippine central bank is widely expected to keep its key interest rate steady at a record low on Thursday, as a resurgence in COVID-19 cases and containment measures could derail the domestic economy’s recovery, a Reuters poll showed.

All but one of 18 economists surveyed see no change to the overnight reverse repurchase facility rate, which has been maintained at 2.0per cent for six consecutive policy meetings since November.

The lone dissenter called for a 25 basis points cut as the imposition of strict lockdown measures in the capital region in August until mid-September dashed hopes of a strong economic rebound this year.

The Philippines slashed this year’s growth target to 4.0per cent-5.0per cent, from the 6.0per cent-7.0per cent expected previously.

Most of the economists also expect the benchmark rate to remain unchanged until the first half of 2022, with the upward pressure on inflation likely to limit the central bank’s room for further policy easing.

“The odds of additional BSP easing are very slim given the current unfriendly inflation backdrop,” said Nicholas Mapa, a senior economist at ING.

BSP Governor Benjamin Diokno said on Sept. 7 that inflation, which last month quickened to 4.9per cent, its fastest pace in nearly three years, could accelerate before easing back to within the 2per cent-4per cent target range by year-end.

(Reporting by Enrico Dela Cruz in Manila, and Vivek Mishra and Shaloo Shrivastava in Bengaluru; Editing by Martin Petty)

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