Bangko Sentral keeps SDA, key rates steady
By Michelle V. RemoThe Bangko Sentral ng Pilipinas on Thursday kept the interest rates on special deposit accounts (SDAs) as well as those for its overnight borrowing and lending unchanged.
The Bangko Sentral ng Pilipinas on Thursday kept the interest rates on special deposit accounts (SDAs) as well as those for its overnight borrowing and lending unchanged.
The Bangko Sentral ng Pilipinas (BSP) has hinted at another easing of monetary policy in the coming Monetary Board meeting next week following the release of low-inflation data for May.
Savers in the country continued to earn a miniscule amount from keeping their money in banks, with the average annual interest rate on savings accounts averaging only 1.04 percent in March.
As speculations abound that the interest rate on special deposit accounts (SDAs) would be slashed further, the Bangko Sentral ng Pilipinas said it could not rule out another rate cut.
After cutting the rate on special deposit accounts (SDAs) by a total of 150 basis points, the Bangko Sentral ng Pilipinas is not likely done
with the current monetary easing cycle, a Bank of the Philippine Islands economic research said.
The Bangko Sentral ng Pilipinas is widely expected to slash rates on special deposit accounts (SDAs) by another 50 basis points during its monetary policy setting meeting on Thursday.
Monetary authorities are expected to keep policy rates and special deposit account (SDA) rates unchanged on Thursday’s meeting in the wake of recent steps taken to stem speculative inflows.
The peso dropped on the first trading day of the week amid expectations the Bangko Sentral ng Pilipinas again would cut the interest rate on special deposit accounts.
The lower-than-expected inflation rate in March has given the Bangko Sentral ng Pilipinas leeway to slash the rates on special deposit accounts (SDAs) by another 50 basis points during its monetary-setting meeting on April 25, according to an economist at Bank of the Philippine Islands.
Interest rates on treasury bills fell across the board to record lows in the wake of Fitch Ratings’ upgrade of the government’s long-term foreign credit to investment grade.
The Bangko Sentral ng Pilipinas may reduce the interest rates on special deposit accounts (SDAs) by another 100 basis points this year to curb costs and stabilize the peso as inflation is expected to remain benign, economists from JP Morgan Chase and Bank of the Philippine Islands said.
The Bangko Sentral ng Pilipinas is not ruling out further reduction in the interest rate on special deposit accounts.
