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BSP policy rate to stay untouched at 6.25%, analysts say

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Market analysts agree that the BSP will keep its benchmark interest rate unchanged at a 16-year-high of 6.25 percent for the third consecutive policy meeting on Aug. 17, but diverge on whether tightening is done or rate cuts are coming.

“We also expect the significantly softer GDP print will likely convince the BSP to maintain its policy rate [this] week despite ongoing upside risks from food inflation,” according to Citi group.

“We expect the BSP to keep rates untouched but signal a strong willingness to tighten further should upside risks to the inflation outlook materialise,” the Netherlands-based groups said. With the US policy rate at 5.25 percent to 5.5 percent, this spread is currently at 0.75 percentage point to one ppt —or 75 basis points to 100 bps.

 

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