The central bank will announce its decision on Wednesday. The Monetary Board meets later on Tuesday. Ten out of 13 analysts expect the central bank to leave the repurchase, or standing deposit facility rate (SDFR), at 6.50 percent; the reverse repurchase,or standing lending facility rate (SLFR), at 8.00 percent; and the statutory reserve ratio (SRR) for commercial banks at 6.00 percent.
Two analysts expect the Central Bank to raise both the repo and reverse repo by 25 basis points while one analyst expects a 25 basis poin cut in both rates.
The central bank scrapped a lower repo penalty rate of 5 percent from March 2, a move seen as an effective rate hike after it said in September it would pay only 5 percent interest rate, instead of 6.5 percent, to commercial banks using its standing deposit facility for a fourth time or more in a calendar month. The limit was imposed to discourage commercial banks from parking deposits in the central bank. Instead, the central bank asked banks to lend more to customers at lower rates.