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Philippine central bank says sees 2015 inflation falling below target

[MANILA]The Philippine central bank said on Thursday average inflation this year was likely to come in below the government's target range despite the threat of a more severe El Nino dry weather phenomenon later in the year.

The Bangko Sentral ng Pilipinas (BSP) now sees average 2015 inflation at 1.8 per cent against the previous estimate of 2.1 per cent, Diwa Guinigundo, deputy central bank governor, told reporters. That is lower than the official inflation target of 2 to 4 per cent this year.

The central bank maintained its forecast for average inflation at 2.5 per cent next year.

The central bank kept its benchmark interest rate steady at 4.0 per cent for the seventh meeting in a row on Thursday. It also kept the rate on its special deposit accounts steady at 2.50 per cent and the reserve requirement ratio at 20 per cent.