October 20th 2005
Central Bank of Philippines raises interest rates
In a surprising move, the Central Bank of Philippines raised interest rates for the third time this year. The move was seen by investors as a preemptive response to certain inflationary trends. The Central Bank also admitted to trying to maintain the interest rate differential between Philippines and the US, so that creditors would continue to hold its debt. The Philippines also recently raised its value-added-tax in order to boost government revenues and decrease its reliance on foreign borrowing. The Philippine Peso received support from the news, reports The Financial Times:
Thursday’s action, which lifted the peso in the last few minutes of trade, took the central bank’s overnight borrowing rate to 7.50 percent and its overnight lending rate to 9.75 percent.
Read More: Philippines raises rates to tackle inflation