{"id":18644,"date":"2024-05-07T03:02:43","date_gmt":"2024-05-07T03:02:43","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-has-leeway-to-keep-rates-steady\/"},"modified":"2024-05-07T03:02:43","modified_gmt":"2024-05-07T03:02:43","slug":"bsp-has-leeway-to-keep-rates-steady","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-has-leeway-to-keep-rates-steady\/","title":{"rendered":"BSP has leeway to keep rates steady"},"content":{"rendered":"
\n

By Luisa Maria Jacinta C. <\/b>Jocson, <\/b><\/span>Reporter<\/i><\/p>\n

THE BANGKO SENTRAL ng <\/span>Pilipinas (BSP) still has room to extend its policy pause even as inf<\/span>lation is expected to have picked up further last month, its top off<\/span>icial said.<\/p>\n

BSP Governor Eli M. Remolona, Jr.<\/span> told reporters on Monday the central bank has \u201cleeway\u201d to keep its benchmark rate steady at its meeting this month.<\/span><\/p>\n

He said the central bank has already considered a potential pickup in April in<\/span>f<\/span>lation.<\/span><\/p>\n

\u201cThat\u2019s already factored in. We know it will be a bit high because of base e<\/span>f<\/span>fects. If it\u2019s too high, that will postpone our easing,\u201d he said in mixed English and Filipino.<\/span><\/p>\n

A BusinessWorld<\/i> poll of 16 analysts last week yielded a median estimate of 4.1% for April in<\/span>f<\/span>lation. This would surpass the 2-4% target for the <\/span>f<\/span>irst time since 4.1%\u00a0 <\/span>in November 2023 and would be faster than 3.7% in March though slower than 6.6% a year ago.<\/span><\/p>\n

The BSP expects inflation at 3.5-4.3% for the month. April consumer price index data will be released on May 7.<\/span><\/p>\n

The central bank chief said they are still leaning toward hawkishness amid elevated inf<\/span>lation.<\/p>\n

\u201cInflation is hovering around 3.9%, so that\u2019s risky,\u201d Mr. Remolona said. \u201cInflation should be around 3%. The 3.9%, it is easy to fall back to 4.1%, so we are still hawkish.\u201d <\/span><\/p>\n

The BSP may begin to cut rates if in<\/span>f<\/span>lation can ease to about 3% and stay within that range for several months, he said.<\/span><\/p>\n

\u201cIf we do ease, it would be by just 25 basis points (bps). If it\u2019s more than 25 bps, that\u2019s like there is a recession or a hard landing. <\/span>Right now, we don\u2019t see it coming.\u201d<\/span><\/p>\n

The Monetary Board will review policy on May 16. The BSP kept its policy rate at a 17-year high of 6.5% for a fourth straight meeting in April.<\/p>\n

The central bank raised borrowing costs by 450 bps from May 2022 to October 2023 to tame red-hot inf<\/span>lation.<\/p>\n

ANZ Research said in a report that it does not expect the BSP to deliver any rate cuts this year.<\/p>\n

\u201cThe narrative in the Philippines is slightly dif<\/span>ferent in that inf<\/span>lation is running close to the upper bound of the off<\/span>icial target owing to elevated rice and energy prices, both of which are imported,\u201d it said.<\/p>\n

\u201cPersistent currency weakness arising from monetary easing will now potentially push up the landed costs of these imports,\u201d it added.<\/p>\n

Mr. Remolona earlier said that if inf<\/span>lation risks persist, policy easing might be delayed to as late as the f<\/span>irst quarter of 2025.<\/p>\n

PESO INTERVENTION
\n<\/b>Meanwhile, Mr. Remolona said the BSP has only had to intervene in the foreign exchange market in \u201csmall amounts\u201d amid the recent weakness of the peso.<\/p>\n

\u201cWe were active in small amounts, not to affect the value but to maintain orderly markets,\u201d he said.<\/p>\n

After hitting 17-month lows against the dollar in the past two weeks, the peso has begun to stabilize, closing at P57.22 versus the greenback on Monday, appreciating by 12.5 centavos from its P57.345 <\/span>f<\/span>inish on Friday.<\/span><\/p>\n

Year to date, the peso has declined by P1.85 from its end-2023 close of P55.37 a dollar.<\/span><\/p>\n

The BSP chief added that he is not that concerned about the peso\u2019s recent depreciation.<\/span><\/p>\n

\u201cThere is not much stress yet in movements of the peso. We\u2019d like to intervene signi<\/span>f<\/span>icantly when there\u2019s stress,\u201d Mr. Remolona said.<\/span><\/p>\n

\u201cWe know it\u2019s a strong dollar because a lot of other currencies have also weakened. It\u2019s not a very strong ground for intervention,\u201d he added.<\/p>\n

In October 2022, the peso reached a record low of P59 against the dollar. This added to inf<\/span>lationary pressures and prompted the BSP to intervene in the foreign exchange market and raise interest rates.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE BANGKO SENTRAL ng Pilipinas (BSP) still has room to extend its policy pause even as inflation is expected to have picked up further last month, its top official said.<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[5796,14644,188,3550,17753,8579,15525],"class_list":["post-18644","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-bsp","tag-bworldonline","tag-has","tag-keep","tag-leeway","tag-rates","tag-steady"],"yoast_head":"\nBSP has leeway to keep rates steady - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/bsp-has-leeway-to-keep-rates-steady\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP has leeway to keep rates steady - 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