Thailand and the Philippines – Currency Thoughts
Thailand and the Philippines
October 16, 2024
The Central Bank of the Philippines‘ key interest rate was lowered by 25 basis points today to 6.0% in a follow-up to an initial 25-bp cut in August. A peak of 6.5% had been reached in August 2023 after increases totaling 100 bps in 2023 and 350 bps in the second half of 2022. Filipino CPI inflation slid under the central bank’s target range of 2-4% to 1.9% last month. Officials concluded, “The within-target inflation outlook and well-anchored inflation expectations continue to support the BSP’s shift toward less restrictive monetary policy… the Monetary Board will maintain a measured approach in its easing cycle to ensure price stability conducive to sustainable economic growth and employment.”
The Bank of Thailand monetary policy committee by a vote of 5-2 unexpectedly agreed to initiate a cycle of interest rate reduction, lowering its 1-day repo rate by 25 basis points to 2.25% today. Such was the first cut since May 2020 ended a peak 2.5% level maintained since August 2023. “The Committee deems that a neutral stance of policy rate remains appropriate with the economic growth and inflation outlook.” CPI inflation in Thailand is targeted at 1-3% but has fallen from a crest of 7.9% in August 2022 all the way to 0.6% as of September. The two dissents has preferred leaving the interest rate unchanged, in order to “preserve policy space amid ongoing uncertainties.”
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Thailand, Central Bank of The Philippines
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