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Sep 13, 2018 @ 16:23

Rate hikes a net downer for the economy, this analyst says


There’s no use sugarcoating this.

Nicky Franco, head of research at Abacus Securities, has called out an analysis piece which he said is “sugarcoating” the impact of higher interest rates courtesy of the Bangko Sentral ng Pilipinas (BSP).

The central bank has raised rates for a total of 100 basis points this year, with markets still expecting more to come as inflation has not shown a letdown.

“As with most things, there are good and bad effects. But on a net basis, higher rates = slower economy especially if the hikes are rapid,” Franco said in reaction to an article that discusses how rising yields can be good for the Philippines.

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