(Reuters) – The Philippine central bank signalled on Thursday it planned a 75 basis point hike in its key interest rates at its policy meeting later this month to match the latest monetary tightening by the U.S. Federal Reserve.
“(The Fed hike) supports the BSP’s stance to hike its policy rate by the same amount in its next policy meeting on November 17,” Bangko Sentral ng Pilipinas Governor Felipe Medalla said in a statement.
“The BSP deems it necessary to maintain the interest rate differential prevailing before the most recent Fed rate hike, in line with its price stability mandate and the need to temper any impact on the country’s exchange rate of the most recent Fed rate hike,” he said.
By matching the Fed’s rate hike, Medalla said the BSP reiterated its strong commitment to maintaining price stability by aggressively dealing with inflationary pressures stemming from local and global factors.
He cited the BSP’s preparedness to “take necessary policy actions to bring inflation toward a target-consistent path”, as he projected headline inflation to return to the 2%-4% target band in the second half of 2023 and full-year 2024.
(Reporting by Enrico Dela Cruz and Neil Jerome Morales; Editing by Ed Davies)
