BSP raises key interest rate by 50 bps to 3.75%

As expected, the Monetary Board again raised the Bangko Sentral ng Pilipinas key policy rate, or the interest rate on money that the central bank borrows from banks, by 50 basis points to 3.75 percent.

With the rise in the BSP’s overnight borrowing rate that takes effect on Aug. 19, the interest rates on the overnight deposit and lending facilities were also raised by as much to 3.25 percent and 4.25 percent, respectively.

MB chair and BSP Governor Felipe Medalla said in a briefing average inflation projections have shifted upwards, to an average of 5.4 percent in 2022, way higher than the government’s target range of 2 percent to 4 percent.