4 C
New York
Sunday, February 25, 2024

Philippines central bank keeps rates steady, but ready to resume hikes if needed

Philippines central bank keeps rates steady, but ready to resume hikes if needed
© Reuters

 

USD/PHP
-0.01%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

By Neil Jerome Morales and Enrico Dela Cruz

MANILA (Reuters) -The Philippine central bank left its benchmark interest rate steady at 6.25% for a third straight meeting on Thursday, saying it needed to balance the need to support economic growth while keeping inflation in check.

While inflation risks were tilted to the upside, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said the central bank “recognised the challenging outlook for economic growth.”

The BSP’s decision to extend its policy pause followed data last week showing the economy grew at its slowest annual pace in nearly 12 years in the second quarter, due to a contraction in government spending and weaker domestic demand.

All but one of the 20 economists in a Aug. 7-14 poll by Reuters had expected the central bank to leave its overnight borrowing rate unchanged. One predicted a 25 basis point rate hike.

The peso, which hit its weakest level since November on Monday amid concerns about China’s faltering economic growth and more rate hikes from the U.S. Federal Reserve, weakened 0.2% to 56.75 to the dollar after the central bank’s decision.

BSP Deputy Governor Francisco Dakila said the central bank has always let the market determine the exchange rate but it has the “option to intervene” when needed.

Inflation for this year and next was seen averaging 5.6% and 3.3%, respectively, the central bank said, higher than its earlier projections of 5.4% and 2.9% due to the impact of higher global oil prices.

Remolona, who chaired his first policy meeting as governor on Thursday, said the central bank was “ready to resume tightening when necessary.”

“The rates are not that elevated. They are still low enough to not be a factor in growth,” he said.

Prices have cooled for a sixth straight month in July, but the 4.7% inflation rate remained outside the central bank’s 2% to 4% comfort range.

ING economist Nicholas Mapa said in a note he expected the BSP to leave rates unchanged for the rest of the year, but it could consider a hike should the Fed opt to increase policy rates before the end of 2023.

Source: Investing.com

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,268FansLike
12,893FollowersFollow
730FollowersFollow
- Advertisement -

Latest Articles

Popular Articles