Wanderlusting Posted October 30, 2014 Share Posted October 30, 2014 Lower rates = better business bottomline. You save on interest costs when BSP lowers down the rate. Eto kse yun guiding rate ng banks sa pagpapautang. This is not always the case. Recent example was pre-May 2013 before Bernanke announced "end of US quantitative easing." We later find out this was not true. But anyway... If you recall, ForEx was in 40 - 41 range. Primarily driven by hot money coming in since PH had one of the highest rates compared to other emerging markets. So in that case, the high rates (relative to other countries) was a driver for economic growth. Post-May 2013, what happened? Because US announced QE may end soon, liquidity suddenly started going from emerging markets back to the US. In a span of one-month, both ForEx and PH equities were severely hit. Anyway, point is that the driver for the pre-May 2013 good ForEx and Equities in the PH was high rates. Quote Link to comment
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