November 06, 2024 16:45 GMT
MNI BCRP Preview - Nov'24: Further Easing, But Timing Unclear
Analysts suggest the outcome of the November meeting will be a close call, with a narrow majority expecting a 25bp cut.
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Executive Summary
- Analyst estimates suggest the outcome of the November meeting will be a close call, with a narrow majority on the latest Bloomberg survey leaning towards the central bank delivering a 25bp reference rate cut to 5.00%.
- Lower-than-expected October inflation data would support the MPC opting to ease policy further.
- However, the close proximity to the US election and the hawkish repricing across global fixed income markets considerably raises the likelihood of the BCRP maintaining rates at 5.25%, as it did in October.
Click to view the full preview: MNI BCRP Preview - Nov 2024.pdf
Domestic macro developments keep the door open for the BCRP to resume its easing cycle this week, following the surprise decision to pause last month. In October, headline consumer prices fell for a second month running, taking the annual rate to 2.01% y/y, in-line with the mid-point of the central bank’s 1-3% target range. At the same time, core inflation, which the central bank has placed more focus on in recent months, fell by another 14bp to 2.50% y/y, its lowest level since August 2021.
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