(Bloomberg) -- The Philippine central bank is done with easing monetary policy for this year after it cut interest rates three times and pumped liquidity into the banking system, Governor Benjamin Diokno said.
When asked if there would be no more reductions in the benchmark rate or reserve requirement ratio in 2019, Diokno said “absolutely.” Monetary authorities have done “more than enough” for the year, he said in a text message from his mobile phone.
Bangko Sentral ng Pilipinas has lowered its policy rate by a total of 75 basis points this year and will bring down the reserve ratio to 14% by December from 18% in May. The central bank has two scheduled rate decisions for the rest of the year: next week and Dec. 12.
The central bank has been loosening policy this year in the face of slowing inflation and a weakening economy. Data on Tuesday will probably show annual inflation slowing for a fifth straight month to 0.8% in October.
Finance Secretary Carlos Dominguez, in a briefing at the sidelines of the ASEAN Summit in Bangkok on Monday, said recent monetary easing “is sufficient and will do the job.” Third-quarter economic growth likely accelerated from the previous two quarters on higher government spending, he said.
The officials’ comments on monetary policy, along with expectations for benign inflation data, helped to spur the peso. It gained 0.6% to 50.45 against the dollar as of 2:15 p.m. on Monday, the strongest level since January 2018.
The exchange rate should now test the 50-level this month, especially as overseas Filipinos also send home money ahead of the Christmas holidays, said Jonathan Ravelas, chief market strategist at BDO Unibank Inc.
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR