‘Good chance’ for BSP to pause rate hikes later this year: analyst


Posted at Mar 24 2023 10:28 AM

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The Bangko Sentral ng Pilipinas may pause its interest rate hiking streak as the US Federal Reserve signaled to do the same later this year, an analyst said Friday.

BSP Gov. Felipe Medalla on Thursday announced another 25 basis point hike, which brought the benchmark policy rate to 6.25 percent. 

"Maintaining perhaps an appropriate interest rate differential that helps to temper capital flow volatility in and out of the Philippines to stabilize the peso, that also is a key tool towards actually managing inflation,” Moody’s Investor Service SVP of Sovereign Risk Group Christian De Guzman told ANC.

“Given our view that the Fed will start to pause later this year, there is also a good chance that the Philippines might also do the same,” he said. 

He said keeping the peso stable is also key to managing inflation.

Moody’s Investor Service also earlier lowered it gross domestic product growth outlook for the country to 5.7 percent from 7.1 percent in 2023.