{"id":19747,"date":"2024-07-15T03:13:32","date_gmt":"2024-07-15T03:13:32","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/larger-than-expected-rate-cuts-likely-nomura\/"},"modified":"2024-07-15T03:13:32","modified_gmt":"2024-07-15T03:13:32","slug":"larger-than-expected-rate-cuts-likely-nomura","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/larger-than-expected-rate-cuts-likely-nomura\/","title":{"rendered":"\u2018Larger-than-expected\u2019 rate cuts likely \u2014 Nomura"},"content":{"rendered":"
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THE BANGKO SENTRAL ng <\/span>Pili<\/span>pinas (BPS) may deliver \u201clarger-<\/span>than-expected\u201d rate cuts, with <\/span>the possibility of up to 250 basis points (bps) worth of reductions until 2025, Nomura Global Markets<\/span> Research said.<\/p>\n

\u201cCompared to our baseline, risks are skewed towards more easing in the Philippines and Thailand, less easing in India,\u201d it said in a report.<\/p>\n

In June, the Monetary Board kept its benchmark rate unchanged for a sixth straight meeting at 6.5%, the highest in over 17 years.<\/p>\n

Nomura\u2019s baseline forecast for the Philippines\u2019 policy rate is at 5% at end-2025. However, its Modified Taylor Rule (MTR) estimates see the key rate slashed to as low as 4%.<\/p>\n

According to the report, the MTR estimates to \u201cquantify where Asian policy rates \u2018should be.\u2019\u201d<\/span><\/p>\n

Nomura\u2019s baseline projection also anticipates the BSP to deliver a rate cut in October. It projects a total of 150 bps of cuts by the second quarter of 2025.<\/span><\/p>\n

\u201cHowever, the MTR suggests this would leave policy rates in restrictive territory, given an imminent fall in inflation to below the midpoint of the 2-4% target range, partly aided by lower rice prices.\u201d<\/p>\n

\u201cThe MTR suggests policy easing should begin in Q3 2024, with 250 bps of cumulative cuts to a terminal rate of 4% by Q2 2025,\u201d it added.<\/p>\n

BSP Governor Eli M. Remolona, Jr. has said that the central bank is on track to begin policy easing by August.<\/p>\n

He said that the BSP could cut rates by up to 50 bps this year, with a 25-bp cut each in the third and fourth quarters.<\/p>\n

The Monetary Board has raised rates by a cumulative 450 basis points (bps) from May 2022 to October 2023.<\/p>\n

Nomura also noted the improved expectations of the US Federal Reserve cutting rates this year.<\/p>\n

\u201cThe global backdrop has also become more conducive, with US core (consumer price index) inf<\/span>lation softening in June and setting the stage for the Fed to cut policy rates twice this year, in September and December, consistent with our US economics team\u2019s baseline views,\u201d it said.<\/p>\n

US consumer prices fell for the first time in four years in June amid cheaper gasoline and moderating rents, firmly putting disinflation back on track and putting the Federal Reserve another step closer to cutting interest rates in September, Reuters reported.<\/span><\/p>\n

Financial markets saw a roughly 85% chance of a rate cut at the Fed\u2019s September meeting, compared with about a 70% chance seen before the report. Two rate cuts are anticipated this year.<\/p>\n

Mr. Remolona earlier said that the BSP does not need to wait for the Fed before it begins cutting rates.<\/p>\n

He said that while the BSP monitors the Fed\u2019s moves, it is not a \u201cdecisive factor\u201d in its own monetary decisions.<\/p>\n

The Monetary Board\u2019s (MB) next policy review is on Aug. 15. This is MB\u2019s only meeting scheduled in the third quarter. It is also set to meet on Oct. 17 and Dec. 19, its last two meetings for the year. \u2014 Luisa Maria Jacinta C. Jocson<\/b><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE BANGKO SENTRAL ng Pilipinas (BPS) may deliver \u201clarger-than-expected\u201d rate cuts, with the possibility of up to 250 basis points (bps) worth of reductions until 2025, Nomura Global Markets Research said. \u201cCompared to our baseline, risks are skewed towards more easing in the Philippines and Thailand, less easing in India,\u201d it said in a report. [\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":[18742,14644,2527,252,18743,1744,11],"class_list":["post-19747","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-larger-than-expected","tag-bworldonline","tag-cuts","tag-likely","tag-nomura","tag-rate","tag-years"],"yoast_head":"\n\u2018Larger-than-expected\u2019 rate cuts likely \u2014 Nomura - 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\/larger-than-expected-rate-cuts-likely-nomura\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u2018Larger-than-expected\u2019 rate cuts likely \u2014 Nomura - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"THE BANGKO SENTRAL ng Pilipinas (BPS) may deliver \u201clarger-than-expected\u201d rate cuts, with the possibility of up to 250 basis points (bps) worth of reductions until 2025, Nomura Global Markets Research said. \u201cCompared to our baseline, risks are skewed towards more easing in the Philippines and Thailand, less easing in India,\u201d it said in a report. 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