{"id":19550,"date":"2024-07-02T03:04:35","date_gmt":"2024-07-02T03:04:35","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-may-cut-by-50-bps-in-october-bmi\/"},"modified":"2024-07-02T03:04:35","modified_gmt":"2024-07-02T03:04:35","slug":"bsp-may-cut-by-50-bps-in-october-bmi","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-may-cut-by-50-bps-in-october-bmi\/","title":{"rendered":"BSP may cut by 50 bps in October \u2014 BMI"},"content":{"rendered":"
\n

A WEAK PESO may cause the Bangko Sentral ng Pilipinas (BSP) to delay the start of its easing cycle, with a 50-basis-point (bp) cut in October at the earliest, Fitch Solutions\u2019 unit BMI said.<\/span><\/p>\n

\u201cGiven that the peso has come under heavy pressure due to <\/span>f<\/span>luctuations in US interest rate expectations, this will act as a constraint to preemptive loosening,\u201d it said in a commentary.<\/span><\/p>\n

The peso has been trading at the P58-per-dollar range since May, its f<\/span>irst time sinking to the level since November 2022.<\/p>\n

On Monday, the peso closed at P58.65 against the greenback, weakening by four centavos from its P58.61 f<\/span>inish on Friday.<\/p>\n

BMI said currency market volatility is the \u201cbiggest barrier\u201d to the BSP beginning its easing cycle.<\/span><\/p>\n

It noted that the BSP would be \u201cextremely mindful\u201d of any easing because this might a<\/span>f<\/span>fect the peso.<\/span><\/p>\n

\u201cThis feeds into our expectations for the BSP to embark on its f<\/span>irst cut only in October at the earliest. The monetary cycles of both the Philippines and the Fed tend to track each other closely,\u201d BMI said.<\/p>\n

The Monetary Board is scheduled to hold policy meetings on Aug. 15, Oct. 17 and Dec. 19.<\/p>\n

BSP Governor Eli M. Remolona, Jr. has signaled the central bank is on track to cut rates at its Aug. 15 meeting.<\/p>\n

\u201cIn our view, such an early cut remains out of the question even if price pressures ease substantially,\u201d BMI said.<\/p>\n

Mr. Remolona has said the BSP does not need to wait for the Fed before it cuts rates because its monetary decisions are independent of the US central bank.<\/p>\n

Markets now expect a 64% chance of the Fed cutting interest rates in September, unchanged from before the data, as well as another cut in December, Reuters reported after the release of <\/span>better-than-expected US in<\/span>f<\/span>lation data. <\/span><\/p>\n

Fed off<\/span>icials earlier signaled monetary easing as late as December and priced in just one rate cut this year.<\/p>\n

BMI said it only expects the BSP to cut after the US central bank begins its own easing cycle. It sees the Fed cutting rates by a total of 50 bps this year starting in September, with the BSP expected to follow suit.\u00a0<\/span><\/p>\n

\u201cWe are revising our policy rate forecast to incorporate just one 50-bp cut in October at the earliest,\u201d it said.<\/p>\n

\u201cIn sum, we are expecting a 50 bps worth of cuts in 2024 and another 150 bps in 2025.\u201d<\/p>\n

However, BMI still noted the possibility of an earlier cut amid latest signals of the BSP.<\/p>\n

\u201cWith the governor keeping the door open for monetary loosening in August, this suggests that they are pretty unfazed by weakness in the currency,\u201d it said. \u201cAs such, the BSP could very well surprise us with a cut next month if inf<\/span>lationary pressures recede faster than we currently expect.\u201d<\/p>\n

June inf<\/span>lation likely settled at 3.9%, according to the median estimate of a BusinessWorl<\/i>d poll of 14 analysts.<\/p>\n

If realized, this would match the 3.9% print in May. It would also mark the seventh straight month inflation was within the central bank\u2019s 2-4% target.<\/p>\n

The BSP expects full-year inflation to average 3.3%. \u2014 Luisa Maria Jacinta C. Jocson <\/b><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A WEAK PESO may cause the Bangko Sentral ng Pilipinas (BSP) to delay the start of its easing cycle, with a 50-basis-point (bp) cut in October at the earliest, Fitch Solutions\u2019 unit BMI said. \u201cGiven that the peso has come under heavy pressure due to fluctuations in US interest rate expectations, this will act as [\u2026]<\/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":[15331,18090,5796,14644,2243,170,225,11],"class_list":["post-19550","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-bmi","tag-bps","tag-bsp","tag-bworldonline","tag-cut","tag-may","tag-october","tag-years"],"yoast_head":"\nBSP may cut by 50 bps in October \u2014 BMI - 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-may-cut-by-50-bps-in-october-bmi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP may cut by 50 bps in October \u2014 BMI - 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