BSP says in "firm" control that prices are climbing

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BSP "title =" BSP "/> </div> </p></div> <p><b> By Melissa Luz T. Lopez </b><br /><i> Senior Reporter </i></p> <p> The BANGKO SENTRAL ng Pilipinas (BSP) continues to have a firm hand on inflation, said his leader in the middle Nestor A. Espenilla, Jr., governor of the BSP, said the monetary authorities reacted "measured" to soaring consumer prices by two successive increases in interest rates , coupled with weekly auctions of term deposits., contrary to criticisms that the central bank is behind the curve. </p> <p> Espenilla said the BSP continues to have "firm monetary control" despite rapidly rising inflation , which reached a new high of 5.2% in June to bring the cumulative average to 4.3%, beyond the goal of the central bank. </p> <p> "Our two successive rate hikes in May and June were measured and deliberate responses to the changing economic environment and dynamic market conditions. to help anchor in We hope that our expectations will be met and that we will mitigate the effects of second round, thus underlining our commitment to ensure price stability, "said Mr. Espenilla in a speech to the Institute of Directors of companies last Tuesday </p> <p>. </p> <p> The Monetary Council tightened rates with two increases of 25 basis points (bps) at its May and June meetings, raising benchmark rates to 3-4%. 19659005] Mr. Espenilla made his last statement as more and more economists observe a further rise in the rates of the 9 August Monetary Council meeting. </p> <p> Bernardo M. Villegas, Professor of Economics at the University of Asia and the Pacific In a separate report, HSBC economist, Noelan Arbis, also noted that the bank Central needed a stronger political response since inflation is not expected to decline rapidly. "We believe that the" June shock "has broad implications and, as noted above, calls for a more aggressive response from the BSP.We anticipate a 50bp rate hike at the next meeting (probably in August) , recognizing that inflation is now well above initial expectations and showing the central bank's willingness to reduce it as quickly as possible, "said the World Bank. published yesterday </p> <p>. Arbis noted that another 25bp hike is already expected by market players, but that rising rates one notch would be "more preventative" than reactive to inflationary pressures. </p> <p> HSBC sees inflation peaking at 5.5% The bank economist also sees low odds for another reduction in bank reserve requirements until December when conditions become "less favorable" . </p> <p> Despite inflationary concerns, Espenilla said the Philippines The capital outflows seen in recent months are likely to be temporary, said the head of the central bank, noting that long-term prospects still indicate growth sustained and solid fundamentals. </p> <p> "We note that the country's balance of payments (OTP) position has posted deficits since 2016 due to strong currency outflows." With the normalization of US monetary policy and rising interest rates, global interest, we find significant corrections, "said Mr. Espenilla, in the capital flows that affect our BoP and the exchange rate.This is compounded by the uncertainties posed by the trade war and the geopolitical risks," he said. he adds. </p> <p> "Nevertheless, we consider that there are short-term macro-stability challenges, and in the medium term, our solid fundamentals should be very useful to us." </p> <p> Espenilla also sees a dynamic More than six per cent growth supported by the manufacturing sector, strong spending by consumers and the government, as well as a young and skilled workforce. </p> <p> Duterte's administration aims to grow the economy by 7 to 8% year, faster than the pace of 6.7% observed in 2017. </p> <footer> </footer></div> </pre> </pre> [ad_2] <br /><a href=Source link

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