imageMANILA: The Philippine central bank is likely to keep its key policy rate steady on Thursday as it prepares to transition to an "interest rate corridor" system in the current quarter, a Reuters poll showed.

Ten of 11 economists surveyed by Reuters said the central bank will leave the overnight borrowing rate at 4.0 percent, where it has been since September 2014.

One expected the central bank to set the corridor on Thursday by reducing the main rate to 3.5 percent and the lending rate to 4.5 percent from 6 percent, but to leave the special deposit accounts rate at 2.5 percent.

Bangko Sentral ng Pilipinas Governor Amando Tetangco has repeatedly said there was no need to change policy settings given the subdued inflation outlook.

The interest corridor system, or IRC, is an operational adjustment and is not meant to reflect a change in the country's monetary policy stance, the central bank has said.

The IRC will be accompanied by a term auction facility that will allow banks to deposit money with the monetary authority to guide market interest rates towards the central bank's main policy rate.

Copyright Reuters, 2016

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