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Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno on Thursday said the BSP reaffirmed its commitment to remain “accommodative” to support the economy during the pandemic by keeping the interest rate at a record low.

Diokno said this was the 7th consecutive policy meeting that the BSP kept the benchmark interest rate steady at 2 percent and to reduce the reserve requirement is “not the right thing to do” as of this time.

Although inflation accelerated to 4.9 percent in August from 4 percent in July, Diokno said it remained within expectations and is likely to settle within the middle band of the government target of 2 to 4 percent target range by 2022.

Despite the positive economic growth in the second quarter and the progress in the country’s COVID-19 vaccination plan, the BSP said the new Delta variant could pose risks to recovery.

Economic growth hit 11.8 percent in the second quarter following a contraction of 3.9 percent in the first quarter. 

The high growth figure in Q2 takes into account the low base effects, as the economy contracted by a record 17 percent in the same period last year.

Other central banks have hinted they will soon start raising interest rates as economic recovery in their respective countries gather pace. Many are taking their cue from the US Federal Reserve which is expected to “soon” taper off its monetary stimulus.