Inflation and currency risks will likely prompt monetary authorities to raise the policy rate by 50 basis points (bps) this year, a Fitch unit said. “We forecast the Bangko Sentral ng Pilipinas to hike its benchmark interest rate by 50 bps to 3.50 percent by end-2018 due to rising inflationary pressures and downside pressure on the currency,” BMI Research said in a report. Central bank Governor Nestor Espenilla Jr. has dismissed concerns over inflation, saying that the rise in consumer prices would return to the target range next year, and also rejected “one-for-one” rate hikes in response to US Federal Reserve actions. The US central bank, which will be holding a two-day policy meeting this week, is expected to announce its first interest rate hike for the year this Wednesday. The Monetary Board will also be meeting to discuss policy on Thursday.

Source: Manila Times March 20, 2018 17:03 UTC