25-Basis Point Central Bank Interest Rate Cuts in the Philippines and Norway – Currency Thoughts

25-Basis Point Central Bank Interest Rate Cuts in the Philippines and Norway

June 19, 2025

The Central Bank of the Philippines’ policy interest rate was cut today by 25 basis points to 5.25%, a 30-month low. This move was the fifth quarter percentage point drop since last August. Consumer price inflation of 1.3% last month was at a 56-month low and under the central bank’s target of 2-4%. Projected consumer price inflation was revised downward to 1.6% this year, 3.4% in 2026 and 2.3% in 2027.

In a move that had not been anticipated, the key interest rate at the Bank of Norway was sliced by 25 basis points to 4.25%. This was its first reduction since the peak of 4.50% was attained in December 2023. Today’s cut was the first since May 2020 when zero percent was imposed early in the pandemic. Although Norwegian inflation of 3.0% last month was above April’s reading and the target of 2%, a released statement from policymakers proclaims that  “it is now appropriate to begin a cautious normalisation of the policy rate” in order to “pave the way for inflation to return to target without restricting the economy more than necessary.” At 4.25%, policy is still restrictive. One or two more small cuts are possible this year with a level of around 3.0% in mind by the end of next year.

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Bangko Sentral ng Pilipinass, Bank of Norway

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on Thursday, June 19th, 2025 at 8:20 am and is filed under Central Bank Watch.
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