Philippine central bank raises interest rate for third straight month

A street vendor gives Philippine peso currency change to a customer in Manila in 2012. (Photo: AFP)

Hanoi (VNA) - The central bank of the Philippines on July 14 announced a surprise interest rate hike - the increase for the third month in a row.

The bank also warned that there may be further rate hikes to curb the upward momentum of energy and food prices.

The move follows similar increases after central banks around the world raised interest rates as the Ukraine crisis and supply disruptions cause inflation and increase the financial strain on households and businesses.

Governor of the central bank Felipe Medalla said the monetary board of the bank had agreed to raise its key rate by 75 basis points to 3.25%, effective immediately. 

Overnight deposit and lending facilities were increased by 2.75% and 3.75%, respectively.

Previously, the bank had kept its interest rates at a historic low since November 2020 to support the economy during the COVID-19 pandemic.

Medalla said a strong rebound in growth this year suggested the economy could withstand tighter monetary policy, adding that the bank was ready to "take further necessary actions" to curb inflation, he added./.

VNA