THE Monetary Board is expected to hike interest rates by as much as 50 basis points in its meeting this week, according to Moody’s Analytics.
In its Asia Pacific economic preview, Moody’s Analytics expects BSP to raise the overnight reverse repo rate to 5.5 percent from the current 5 percent. The BSP in its last meeting raised interest rates by 75 basis points to 5 percent.
A week ago, Bangko Sentral ng Pilipinas Governor Felipe Medalla said the monetary authorities may be leaning toward raising interest rates by 25 basis points to as much as 50 basis points this Thursday, December 15. (Full story: https://businessmirror.com.ph/2022/12/02/phls-next-rate-increase-may-be-quarter-or-half-point-bsp-gov/)
Meanwhile, Moody’s Analytics also expects the country’s trade deficit to widen further to $4.9 billion in October, slightly higher than the $4.8 billion posted in September.
Based on the September data from the Philippine Statistics Authority (PSA), the country’s trade deficit posted an increase of 26.5 percent from $3.81 billion in September 2021.
The PSA also noted that the trade deficit in August 2022 recorded an annual increase of 81.9 percent, while in September 2021, it posted a growth of 68.1 percent.
In the January to September 2022 period, PSA data showed the country’s trade deficit amounted to $46.65 billion. This was 63.2 percent higher than the $28.58 billion posted in the same period in 2021.
Meanwhile, Moody’s Analytics noted that other central banks in the region that tightened their monetary policy include the Reserve Bank of India (RBI), which lifted the benchmark repo rate by 35 basis points to 6.25 percent in December.
This is on top of the 50-basis- point hike the RBI implemented in its meeting in September this year, according to Moody’s Analytics.
The Reserve Bank of Australia, Moody’s Analytics said, also lifted the cash rate by 25 basis points in December, leading official interest rates to reach 3.1 percent.