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HomeEconomyPhilippine finance minister expects 'long pause' in rate hikes

Philippine finance minister expects 'long pause' in rate hikes

MANILA (Reuters) – Philippine Finance Secretary Benjamin Diokno said he expects a “prolonged pause” in the Philippine central bank, where it makes policy, as inflation is expected to retreat. “Stable interest rate hikes.

The bank held its second consecutive meeting on Thursday to hold its key policy rate steady at 6.25%.

“I think we’re going to keep going,” Diokno told reporters on Friday. “It’s going to be a long pause. I don’t see any rate cuts until we actually have strong evidence that inflation is coming down,” Diokno said.

He is on the policymaking Monetary Committee One of seven members, the committee will next meet in August to review policy under new leadership. central bank governor.

President Ferdinand Marcos Jr on Friday named board member Eli Remolona as governor of the Philippine central bank, succeeding Felipe Medalla, who oversaw the central bank’s most aggressive tightening in years.

Since May last year, the central bank has raised interest rates by 25 basis points to combat inflation. The growth rate in May has slowed to 6.1% for four consecutive months, but it is still higher than the central bank’s 2%-4% target.

A majority in a Reuters poll predicts the bank will remain on hold for the rest of the year, although a minority sees a rate cut as soon as this year – end .

“Our expectation is that inflation may be below 2% in the first quarter of next year due to high base effects. That would be the time to consider spending cuts,” Diokno said.

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