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BSP to maintain rates – poll
The Bangko Sentral ng Pilipinas (BSP) is expected to maintain its key interest rates at record lows in its upcoming policy meeting, according to a poll conducted by Reuters.
All 15 economists surveyed by Reuters predicted that the BSP would keep its overnight borrowing rate at 2.0%, while 14 of them said the central bank would also maintain its overnight lending rate at 2.5%.
The BSP has kept its policy rates unchanged since cutting them by a total of 200 basis points last year to support the economy amid the COVID-19 pandemic. The central bank has also implemented various measures to boost liquidity and credit growth, including reducing banks’ reserve requirements and launching a lending facility for small businesses.
Despite the recent surge in COVID-19 cases in the Philippines, economists believe that the BSP will continue to prioritize supporting economic recovery over inflation concerns. Inflation in the country has remained within the BSP’s target range of 2-4% for the past few months, and is expected to remain manageable in the near term.
However, some analysts have warned that the BSP may need to start tightening its monetary policy in the second half of the year if inflationary pressures start to build up. The government’s infrastructure spending program and the global economic recovery could also lead to higher inflation in the coming months.
Overall, the consensus among economists is that the BSP will maintain its accommodative stance for now, but will closely monitor economic developments and adjust its policy as needed to support sustainable growth and price stability.