The Bangko Sentral ng Pilipinas will likely cut the key interest rates by the first half of 2024 after holding on for the rest of 2023 on the back of falling inflation, a unit of Fitch Group said in a report Monday.
BMI said for the next month alone, the BSP might continue keeping the overnight borrowing rate unchanged at 6.25 percent.
“We think that the BSP will leave interest rates on hold once again at the next meeting on Aug. 17 given falling inflation,” it said.
“Given that inflation is falling faster than what we originally anticipated, economic activity is starting to soften and the US Fed is nearing the end of its tightening cycle, we now think that policy rates will be kept on hold for the remainder of the year, and only be cut in 2024,” it said.
The Monetary Board kept the policy interest rate steady at 6.25 percent last week due to the successive deceleration in inflation since its peak in January 2023 at 8.7 percent. Inflation slowed to 8.6 percent in February, 7.6 percent in March, 6.6 percent in April and 6.1 percent in May.