In an effort to stem escalating inflationary pressure and save the faltering peso, the Bangko Sentral ng Pilipinas increased key interest rates by 75 basis points while also leaving the door open for further tightening.
The Monetary Board (MB) raised the key policy rate of the Bangko Sentral ng Pilipinas by 75 basis points to 3.25 percent effective immediately and the interest rate on the BSP’s overnight borrowings from banks was changed during a regular meeting of the MB.
RELATED STORY: Controlling inflation Filipinos’ top concern – Pulse Asia
“In raising the policy interest rate anew, the Monetary Board recognized that a significant further tightening of monetary policy was warranted by signs of sustained and broadening price pressures amid the ongoing normalization of monetary policy settings,” said BSP Governor Felipe Medalla.
The next policy meeting of the MB is set for August 18. The MB also raised the interest rates on the BSP’s overnight deposit and lending facilities to 2.75 percent and 3.75 percent, respectively.
READ ON: Bongbong Marcos rejects PSA report of 6.1% inflation rate in June
“The Monetary Board noted that favorable conditions arising from the strong rebound in growth thus far in the year suggest that the domestic economy can accommodate a further tightening of monetary policy settings,” he added.
