Mathematicians from Ateneo de Manila University have developed artificial intelligence deep learning tools that can help predict money market interest rates, a valuable tool for business and government decision-makers.
Halle Megan Bata, Mark Jayson Victoria, Wyonna Chezska Alvarez, Elvira de Lara-Tuprio, and Armin Paul Allado published their paper, “Deep Learning Approaches in Interest Rate Forecasting,” on Nov. 15, 2024, in the journal AIP Conference Proceedings.“Interest rates are among the most important macroeconomic factors considered by both government and private entities when making investment and policy decisions.
The market interest rate is the cost of borrowing money or the reward for saving it. It fluctuates based on supply and demand. If many people are borrowing but few are saving, rates rise. Conversely, if more people are saving than borrowing, rates decline. The Ateneo researchers tested two deep learning models: Multi-layer Perceptrons and Vanilla Generative Adversarial Networks . Both models successfully anticipated changes in Philippine benchmark valuation rates before and during the pandemic, demonstrating their potential to foresee economic fluctuations and market disruptions.