Fitch: BSP to hike rates by 150 basis points through 2023
Money

Fitch: BSP to hike rates by 150 basis points through 2023

The Bangko Sentral ng Pilipinas (BSP) is seen jacking up key interest rates by 150 basis points over the next two years amid the Federal Reserve’s aggressive tightening.

Fitch Solutions Country Risk & Industry Research expects the BSP’s Monetary Board to deliver an aggressive rate hike of 75 basis points this year and another 75 basis points in 2023.

“In 2023, we expect the BSP to continue hiking, taking its policy rate to 3.5 percent and its real policy positive, providing support for the unit. Moreover, the Philippines’ recovering tourism sector and strong growth outlook will bolster investor confidence towards Philippine assets over the medium term,” it said.

As part of its COVID-19 response measures that unleashed P2.3 trillion into the financial system, the BSP cut interest rates by 200 basis points in 2020 to bring the benchmark interest rate to an all-time low of two percent.

Fitch Solutions also sees the peso averaging to 51.80 to $1.

The peso emerged as one of the worst-performing currencies in Asia, falling 6.2 percent to 50.999 to $1 last year.

 

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