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Policy Rate Updates: BSP keeps rates steady
With the latest interest rate decision, there is a greater likelihood that rate cuts will happen some time in the second half of the year.
By Metrobank Research
The Bangko Sentral ng Pilipinas (BSP) decided to keep its overnight reverse repurchase (RRP) rate steady at 6.50% during its first Monetary Board meeting of the year. It is the third time for the BSP to hold rates in its meetings. While the Monetary Board recognizes improvements in inflation, prevailing upside risks to prices remain, specifically higher transport charges, increased electricity rates, higher oil and domestic food prices, and the additional impact on food prices due to a strong El Niño episode.
We maintain our forecast that the BSP will likely start its easing cycle in the latter half of the year, as we see continuing risks to inflation, particularly the high prices of imported rice. Although inflation expectations have stabilized within the BSP’s target range, a slight uptick in headline inflation is expected in the second quarter.
Find out more in our report below.
Policy Rate Updates: BSP keeps rate steady
We continue to see an easing cycle on the horizon.
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