The Monetary Board raised the key policy rates 25 points in an off-cycle meeting on Thursday, bringing the overnight rate to 6.5 percent.

The Monetary Board described the move as an ''urgent monetary measure'' to prevent inflation from expanding further.

''The latest baseline projections point to an elevated inflation path over the policy horizon as upside risks continue to manifest. Before today's monetary policy action, the staff risk-adjusted forecast for 2024 was 4.7 percent (from 4.3 percent previously). This is well above the Government’s target range,'' said the Monetary Board said in a statement.

''At the same time, second-round effects have broadened, including transportation fare increases and minimum wage adjustments. Inflation expectations have risen sharply, highlighting the risk of further second-round effects,'' the Monetary Board said.

''The balance of risks to the inflation outlook still leans significantly toward the upside, due mainly to the potential impact of higher transport charges, electricity rates, international oil prices, and minimum wage adjustments in areas outside the National Capital Region,'' the Monetary Board added.

After 4.7 percent inflation for July, inflation rose to 5.3 percent in August and 6.1 percent in September.

The rate-setting meeting was to be held on November 16. DMS