Philippines central bank can’t stay put if the Fed hikes rates

0

MANILA, Nov 18 (Reuters) – The Central Bank of the Philippines cannot stay put if the U.S. Federal Reserve keeps raising interest rates, its governor said on Friday, citing the need to limit peso weakness.

The Fed is expected to make a smaller 50 basis point hike in December after four consecutive 75 basis point hikes, but economists polled by Reuters say a longer period of US policy tightening and a rate spike higher director are the greatest risks to the current. prospects.

“If the Fed is doing 50, we can’t have zero, can we? So the question is whether it’s 25 or 50,” Bangko Sentral ng Pilipinas Governor Felipe Medalla told Reuters. , in an interview.

To fight inflation, the BSP has hiked rates six times this year, including Thursday’s 75 basis point rate hike, largely driven by the need to match the Fed’s three-quarter point hike. this month.

Medalla reiterated that U.S.-Philippine rate differentials should not be allowed to narrow sharply, lest peso weakness persist and drive up already high prices for imported food and fuel.

Reporting by Karen Lema; Editing by Ana Nicolaci da Costa

Our standards: The Thomson Reuters Trust Principles.

Share.

Comments are closed.