BSP done with rate hikes: Fitch unit | ABS-CBN
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BSP done with rate hikes: Fitch unit
BSP done with rate hikes: Fitch unit
ABS-CBN News
Published Jan 08, 2024 11:56 AM PHT
MANILA -- The Bangko Sentral ng Pilipinas (BSP) is done with hiking interest rates, a subsidiary of Fitch Solutions said Monday.
MANILA -- The Bangko Sentral ng Pilipinas (BSP) is done with hiking interest rates, a subsidiary of Fitch Solutions said Monday.
"We think that the Philippine hiking cycle has finally concluded following the BSP's meeting on December 14," according to BMI.
"We think that the Philippine hiking cycle has finally concluded following the BSP's meeting on December 14," according to BMI.
The BSP kept the country’s benchmark target reverse repurchase rate (RRP) steady at 6.5 percent in December--the second consecutive pause after an off-cycle 25 basis points (bps) hike back in October.
The BSP kept the country’s benchmark target reverse repurchase rate (RRP) steady at 6.5 percent in December--the second consecutive pause after an off-cycle 25 basis points (bps) hike back in October.
In a brief, BMI said easing price pressures reduce the need for the BSP to lean towards fresh hikes to anchor inflation expectations.
In a brief, BMI said easing price pressures reduce the need for the BSP to lean towards fresh hikes to anchor inflation expectations.
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BMI said inflation is easing more rapidly than they predicted. Inflation slowed to 3.9 percent in December 2023.
BMI said inflation is easing more rapidly than they predicted. Inflation slowed to 3.9 percent in December 2023.
"We believe this downward trend will persist, and project that inflation will average 3.9 percent in 2024. If we are right, inflation will pose a diminishing concern in the ensuing months," BMI said.
"We believe this downward trend will persist, and project that inflation will average 3.9 percent in 2024. If we are right, inflation will pose a diminishing concern in the ensuing months," BMI said.
BMI also said they expect the BSP to only cut rates in the second half of 2024, in line with their expectations for the United States Federal Reserve to restrict rate cuts to this period.
BMI also said they expect the BSP to only cut rates in the second half of 2024, in line with their expectations for the United States Federal Reserve to restrict rate cuts to this period.
"A pre-emptive return to monetary loosening could not only de-anchor inflation expectations but also weaken the Philippine peso," BMI said.
"A pre-emptive return to monetary loosening could not only de-anchor inflation expectations but also weaken the Philippine peso," BMI said.
BMI also said that Philippine economic growth rates may reduce the urgency for the BSP to lower interest rates.
BMI also said that Philippine economic growth rates may reduce the urgency for the BSP to lower interest rates.
"2024 is set to be a stellar year and we forecast the economy to expand by 6.2 percent," the firm said.
"2024 is set to be a stellar year and we forecast the economy to expand by 6.2 percent," the firm said.
In November, BMI said they see the Philippine economy growing 5.7 percent in 2023.
In November, BMI said they see the Philippine economy growing 5.7 percent in 2023.
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