Gate News bot news, as the inflation rate remains below the target level, the Philippine Central Bank has lowered the Benchmark Interest Rate for the second time this year, by 25 basis points, as widely expected by the market.
On Thursday, the Philippine Central Bank lowered the overnight reverse repurchase rate to 5.25%, in line with the predictions of 29 out of 30 economists in a Bloomberg survey. One economist's prediction remained unchanged.
After inflation further slowed down in May, the Philippine Central Bank continued to maintain an accommodative policy, remaining below the Central Bank's target range of 2%-4% for the third consecutive month. This move aligns with the signal from Central Bank Governor Eli Remolona last month, suggesting that there will be at least two more rate cuts this year, continuing the easing cycle that began in August.
However, due to the oil price increase caused by the conflict in Israel, inflation in the country, which is severely reliant on fuel imports, may worsen. Driven by global risk aversion, the Philippine peso has also weakened. Remolona stated on Wednesday that intervening in the currency market to support the peso is futile, as the peso has depreciated nearly 3% against the dollar this month, becoming the biggest loser in Asia.
The day before, the Central Bank of Indonesia suspended interest rate hikes to stabilize the exchange rate of its currency in response to the trade war and tensions in the Middle East. The Federal Reserve also kept the benchmark interest rate unchanged, with officials stating that the uncertainty surrounding the economic outlook remains very high.
Nevertheless, this interest rate cut will still help support the Southeast Asian economy. The growth rate of the Southeast Asian economy last quarter was below expectations, partly due to U.S. President Donald Trump's tariff threats damaging global market sentiment, leading to a slowdown in investment growth.
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Inflation rate in the Philippines is below target, Central Bank again lowers Benchmark Interest Rate.
Gate News bot news, as the inflation rate remains below the target level, the Philippine Central Bank has lowered the Benchmark Interest Rate for the second time this year, by 25 basis points, as widely expected by the market.
On Thursday, the Philippine Central Bank lowered the overnight reverse repurchase rate to 5.25%, in line with the predictions of 29 out of 30 economists in a Bloomberg survey. One economist's prediction remained unchanged.
After inflation further slowed down in May, the Philippine Central Bank continued to maintain an accommodative policy, remaining below the Central Bank's target range of 2%-4% for the third consecutive month. This move aligns with the signal from Central Bank Governor Eli Remolona last month, suggesting that there will be at least two more rate cuts this year, continuing the easing cycle that began in August.
However, due to the oil price increase caused by the conflict in Israel, inflation in the country, which is severely reliant on fuel imports, may worsen. Driven by global risk aversion, the Philippine peso has also weakened. Remolona stated on Wednesday that intervening in the currency market to support the peso is futile, as the peso has depreciated nearly 3% against the dollar this month, becoming the biggest loser in Asia.
The day before, the Central Bank of Indonesia suspended interest rate hikes to stabilize the exchange rate of its currency in response to the trade war and tensions in the Middle East. The Federal Reserve also kept the benchmark interest rate unchanged, with officials stating that the uncertainty surrounding the economic outlook remains very high.
Nevertheless, this interest rate cut will still help support the Southeast Asian economy. The growth rate of the Southeast Asian economy last quarter was below expectations, partly due to U.S. President Donald Trump's tariff threats damaging global market sentiment, leading to a slowdown in investment growth.