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BSP may hike interest rates as inflation hits five year high

Union Bank of the Philippines chief economist Ruben Carlo Asuncion said that BSP may hike rates to 50 basis points because of the July inflation.


Devdiscourse News Desk 08 Aug 2018, 12:25 AM Philippines
  • BSP ‘s policy-setting Board news to take place on August 9 with the Agenda of deciding on whether to hike key policy rates or not. (Image Credit: Twitter)

The Bango Sentral ng Pilipinas (BSP) may raise interest rates by another 50 basis points after inflation in July skyrocketed.

Union Bank of the Philippines chief economist Ruben Carlo Asuncion said that BSP may hike rates to 50 basis points because of the July inflation.

Last month inflation rose to 5.7 percent, the fastest in last five years. This is the seventh consecutive month that inflation accelerated since 4.0 percent in January.

The economist further added that he expected 5.5 percent but 5.7 percent was beyond imagination. BSP ‘s policy-setting Board news to take place on August 9 with the Agenda of deciding on whether to hike key policy rates or not.

In May and June, The Monetary Board raised policy rates by 25 bps.

Guiana Angelo Dumalagan feels inflation reading was higher than expected and the increase in food prices was beyond estimates.

BSP governor Nestor Espenilla Jr. has indicated a strong policy action to be taken in the Monetary Board meeting in August to tackle increasing inflation risks and also address concerns regarding the volatile foreign market.

 


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