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Policy Rate Updates: Earlier BSP action possible with lower inflation trajectory
Despite the BSP’s more dovish tone, Metrobank Research continues to believe the BSP will lag the Fed’s easing cycle to support the Peso.
By Metrobank Research
The Bangko Sentral ng Pilipinas (BSP) maintained its target overnight reverse repurchase (RRP) rate at 6.50% and reduced its risk-adjusted headline inflation forecast for this year and 2025 to 3.1% from 3.8% and to 3.1% from 3.7%, respectively.
Governor Remolona stated that data supports the course of a possible 25 bps cut each in the third quarter and in the fourth quarter, which could bring the year-end policy rate down to 6.0%.
Earlier BSP action possible with lower inflation trajectory
Metrobank Research maintains its baseline forecast that the BSP will cut by 25 bps each in October and December, which would bring the Reverse Repurchase Rate (RRP) to 6.0% year-end.
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