A CONTINUED weakening of the peso could prompt the Bangko Sentral ng Pilipinas to pause its easing cycle this December, analysts said.
While most economists still see another 25-basis point reduction in the central bank's policy rate, HSBC Global Research economist Aris Dacanay said the peso weakness was one 'risk worth flagging.''If the PHP weakens against the USD due to global events, such as the US election, the BSP may opt to briefly pause its easing in December to give itself some flexibility if financial markets were to remain volatile,' he said in a commentary.
Bank of the Philippine Islands senior economist Emilio Neri echoed this, citing the possibility of a December rate cut due to favorable inflation but also noting that external developments could affect the BSP's decision-making.'The recent depreciation of the peso reflects the market's concerns over the pace of the Federal Reserve's rate cuts and the possibility that the Fed could pause,' he said.
Weakness Could Pause BSP Easing Cycle
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