Economists expect the Bangko Sentral ng Pilipinas (BSP) will not to move benchmarks next Thursday during a monetary policy meeting, and will opt to keep the 6.25 percent policy rate for the rest of the year.
Economists expect the Bangko Sentral ng Pilipinas will not to move benchmarks next Thursday during a monetary policy meeting, and will opt to keep the 6.25 percent policy rate for the rest of the year.
The market is awaiting how the BSP’s Monetary Board will respond after the US Federal Reserve hiked its own rates at the end of July by 25 basis points . “The current path of inflation gives the BSP the space to keep rates steady until the end of the year. So far, the probability of another hike is low, but it could go up depending on what the Fed will do,” said BPI.
“The behavior of the local currency in 2023 may largely depend on what the Federal Reserve will do. Once the Fed is done hiking, the peso may strengthen as markets will likely assess the possibility of rate cuts. If a recession in the US happens, the Fed may cut its rates and the BSP will likely follow.
Remolona also said that despite the decelerating CPI, the BSP is more likely to raise its benchmark rates rather than cutting it.
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