Oliver 9 0 0 4 min to read

This week, Moody’s Analytics predicts a 75 bps increase in BSP rates.

Cebuano Cebuano English English Filipino Filipino

In keeping with the prior declaration by BSP Governor Felipe Medalla, Moody’s Analytics predicts that the Bangko Sentral ng Pilipinas (BSP) key rates would increase by 75 basis points on Thursday.

In its Asia Pacific economic preview for the week of Nov. 14–18, it stated that “Bangko Sentral ng Pilipinas is likely to boost the overnight borrowing rate by 75 basis points to 5 percent.”

On Thursday, the Monetary Board (MB), the BSP’s policy-making body, will hold its second to last rate-setting meeting of the year.

It has already increased the key policy rates of the central bank by 225 basis points since last May in an effort to help control the spiraling domestic inflation rate and help control the peso’s depreciation against the US dollar.

Due to ongoing increases in the prices of commodities such as oil and non-oil ones on the global market, which are partially caused by the ongoing conflict between Russia and Ukraine, the rate of price increases accelerated further in October of last year, reaching 7.7 percent, the highest level since December 2008.

Inflation in the first ten months of this year averaged 5.4 percent, significantly higher than the government’s planned range of 2-4 percent.

Financial officials have emphasized the necessity to raise the key interest rates of the central bank to assist in combat the growing inflation rate because it has already had second-round consequences, such as an increase in the minimum price of public utilities and wages.

They claimed that the ongoing recovery of the domestic economy, which grew by an additional 7.6 percent in the third quarter of this year, would mitigate the effects of the rate hikes.

The world’s monetary policies have been impacted by the rising rate of inflation.

For starters, the US Federal Reserve increased its benchmark interest rates by another 75 basis points earlier this month, which had an impact on currencies like the peso.

BSP Governor Felipe Medalla stated that the BSP will also raise its key rates by the same amount in response to the most recent Fed rate hike announcement in order to maintain an adequate interest rate differential with the US.

The local currency began trading for the week at 57.3, but with the strengthening of the dollar in October, mostly because of the Fed’s rate hikes, it had already closed at its worst level of 59.00 to the dollar three times.

After closing 2021 at 50.999, it has depreciated to its present trading level.

According to Medalla, one of the BSP’s responsibilities is to ensure price stability in the nation, therefore rate increases are necessary.

Cebuano Cebuano English English Filipino Filipino

We appreciate your reading. You may also consider sharing it with others.
Please comment below if you found this post interesting.
Be one of our DONOR / SPONSOR to support NextGenDay news website.
Please follow and like us:
Tweet 2k
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments

Enjoy this blog? Please spread the word :)

Would love your thoughts, please comment.x