December Rate Cut in Philippines Uncertain After Trump Win
(Bloomberg) -- Philippine central bank Governor Eli Remolona said Tuesday that policymakers will consider both a rate cut and a pause during their next meeting in December, in his first comments on the monetary policy path after Donald Trump’s win.
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While a quarter-point reduction in the key rate is still on the table for next month, the Bangko Sentral ng Pilipinas could also stand pat, Remolona said. The BSP could ease by a total of 100 basis points next year, with reductions likely to be done in quarter-point increments, he added.
“It will depend on the data,” the central bank chief said in a recording released to media, clarifying earlier comments he made on a possible rate cut at BSP’s Dec. 19 rate meeting.
Remolona’s comments show how monetary authorities around the world are navigating Trump’s win in the US presidential elections, which could upend the Federal Reserve’s policy calculus. Expectations of a Fed rate cut next month have been pared back, after Chairman Jerome Powell signaled no rush to further lower rates.
The Philippine central bank last month reduced its benchmark interest rate by 25 basis points for the second time this year to 6% as slowing inflation gave it room for further easing. Remolona has said the BSP is unlikely to resort to half-point cuts unless the nation’s economic growth falters.
The BSP remains in an easing cycle, the central bank chief said Tuesday, with inflation expected to stay within its 2%-4% target this month.
He also said the central bank has been intervening “a little bit” in the foreign exchange market, although he made clear that depreciation in the local currency, unless sharp, won’t be necessarily inflationary.
“We monitor the swings that take place over a few months, not daily,” Remolona said.
The Philippine peso has lost almost 1% this month, nearing its record low of 59 to a dollar, amid Trump’s threat of steep tariffs.
--With assistance from Ditas Lopez.
(Updates with new comments from central bank governor.)
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