BMI, a Fitch Solutions company, said Thursday it expects the Bangko Sentral ng Pilipinas to reduce interest rates by the second half of 2024.
“However, if inflation in the US were to surprise to the upside, the Fed would push back the timing of its easing cycle. And the BSP would likely follow suit,” it said. It also maintained the interest rates on overnight deposit and lending facilities at 6.0 percent and 7.0 percent, respectively.“We forecast inflation to average 3.9 percent in 2024. This implies that consumer prices will fluctuate around the 4 percent mark over the coming months especially as the impact of the El-Nino phenomenon continues to feed through,” BMI said.
BMI said that in the absence of external constraints, the BSP would want to cut interest rates as soon as possible to push growth back to trend levels.
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