Bilyonaryo - Business

HSBC sees BSP raising rates by another 50 basis points until until May

February 17, 2023

Bilyonaryo.com

HSBC expects the Bangko Sentral ng Pilipinas to increase its benchmark interest rate by another 50 basis points until May this year to cool red hot inflation.

In a report dated February. 16, HSBC Global Research said BSP Governor Felipe Medalla has indicated continued rate hikes as food prices remain elevated. Inflation accelerated to a 14-year high of 8.7 percent last January.

HSBC sees the BSP raising rates in March and May as it projects inflation to peak in the first quarter.

“We expect the BSP to raise rates until pausing at 6.50 percent by May as non-monetary measures on food supply finally gain some ground but risks persist,” the HSBC report said.

In its meeting last Thursday, the Monetary Board hiked the central bank’s key rates by 50 basis points after noting the higher-than-expected domestic inflation rate last January and upside risks both here and abroad due partly to supply-side factors and the continued recovery of the domestic economy.

For one, the BSP’s overnight reverse repurchase rate is now at 6.5 percent, same as where it was in 2007. (PNA)

Related News Tags: Bangko Sentral ng Pilipinas, Felipe Medalla, HSBC Global Research

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