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The Monetary Board of the Bangko Sentral ng Pilipinas has decided to raise its policy rate by 25 basis points effective Friday, Oct. 27, 2023, in a bid to tame inflation. The interest rate for loans is now at 6.5 percent. This is typically done in response to unexpected economic developments or crises to address issues like inflation, currency stability, or financial market disruptions.
The rupee appreciated 19 paise to close at 82.51 against the US dollar on Wednesday after the Reserve Bank of India (RBI) hiked the repo rate by 25 basis points. The rupee was also bolstered by a rise in domestic equity markets and a drop in the value of the dollar relative to major foreign currencies, according to currency traders.
The Federal Reserve conducted its smallest interest rate increase in nearly a year as it further winds down the most aggressive rate-hiking campaign in four decades in response to signs that the historic inflation of the past few years is slowing down.
An accumulation of evidence that inflation is falling is raising expectations that the Federal Reserve will dial back its rate hikes next week, a prospect that bodes well for the overall economy and raises the chances that the country will evade a recession.
The decision to raise the rate to 5.75% comes just three months after the previous attempt to use the measure to tamp down inflation