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>>USDPHP Forecast: BNY Analysis Highlights BSP’s Careful Stance on Future Rate Reductions

USDPHP Forecast: BNY Analysis Highlights BSP’s Careful Stance on Future Rate Reductions

crypthub

about 7 hours ago

BSP’s High Bar for Rate Cuts

The Bangko Sentral ng Pilipinas sets a high threshold for further easing, favoring inflation stability over rapid cuts. BNY Mellon notes inflation stays in target but faces food and transport pressures while growth stays robust. Rate cuts will only come when headline inflation falls into the lower half of the target, expectations anchor and external risks ease.

USDPHP Outlook and Regional Context

The cautious stance backs the peso, limiting depreciation against a stronger US dollar, though Fed policy can still pressure the PHP. Traders watch rate differentials, risk sentiment and remittances as key USDPHP drivers. Against Bank Indonesia’s dovish tilt and the Bank of Thailand’s neutral stance, the BSP’s hawkishness gives a yield edge that draws stability‑seeking capital.

Growth‑Inflation Trade‑off

Tighter policy may modestly curb short‑term growth but protects long‑term price stability. Higher borrowing costs hit capital‑intensive firms, while savers gain real deposit returns. The BSP targets a soft landing that keeps inflation credibility and a resilient peso.