BSP delivers off-cycle 25-bps rate hike

October 26, 2023

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BANGKO SENTRAL ng Pilipinas Governor Eli M. Remolona, Jr. — BANGKO SENTRAL NG PILIPINAS

The Bangko Sentral ng Pilipinas (BSP) took off-cycle action today, hiking benchmark interest rates by 25 basis points (bps) to 6.5% to re-anchor inflation expectations.

BSP Governor Eli M. Remolona Jr. said the Monetary Board raised its target repurchase rate to 6.50%, effective immediately, from 6.25%.

Rates on the overnight deposit and lending facilities were also hiked by 25 bps to 6% (from 5.75%) and 7% (from 6.75%), respectively.

The BSP’s off-cycle rate hike came ahead of its regular policy meeting scheduled on Nov. 16.

With the latest hike, the Monetary Board has raised benchmark interest rates by a total of 450 bps since May 2022.

This was also the central bank’s second unscheduled policy move during this tightening cycle.

Under the leadership of then-BSP Governor Felipe M. Medalla, the Monetary Board surprised markets by raising rates by 75 bps to 3.25% on July 14, 2022. — Keisha B. Ta-asan

Neil Banzuelo