Sunday, May 22, 2022

In Graphic Detail: Interest Rates

IN GRAPHIC DETAIL

BSP raises key interest rate

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📈 Bangko Sentral ng Pilipinas (BSP) has raised its overnight borrowing rate by 25 basis points (bps) to 2.25 percent effective May 20, as it finally starts to tighten money supply in anticipation of further inflation.

📈 The latest forecast now puts the average inflation in 2022 at 4.6 percent, breaching the upper end of the target band of 2 percent to 4 percent before easing back into that range in 2023 at 3.9 percent.

📈 Putting upward pressure on the inflation outlook are the potential impact of higher oil prices as well as the continued shortage in domestic food supply such as those of pork and fish.

📈 The Monetary Board also observed the emergence of second-round effects, including the higher-than-expected adjustment in minimum wages in some regions.