BSP SURPRISE: Cuts 25 basis points in Interest Rate to 2.00% from the 4.25% in pre-pandemic era - the lowest in history!

MANILA, Philippines — In a move that few had anticipated, the central bank on Thursday (Nov. 19) cut its key interest rate by a quarter of a percentage point, driving yields deeper into negative territory and saying the Philippine economy needed more support and consumers more confidence after a tepid third quarter growth.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said that the prevailing low inflation rate regime also gave regulators enough room to release more liquidity into the financial system, hoping that this will accelerate spending.

The Monetary Board’s decision to cut the interest rate on the BSP’s overnight reverse repurchase facility by 25 basis points brought the key rate, on which banks based lending rates, to 2 percent effective on Friday (Nov. 20).

Interest rates on overnight deposit were reduced to 1.5 percent and lending facilities to 2.5 percent.

By: Daxim L. Lucas - Reporter

Read more: https://business.inquirer.net/312052/bsp-surprise-another-rate-cut-to-push-ph-economic-pedal