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MNI BSP Preview - June 2022: Smaller Doses To Make Pills Less Bitter To Swallow

MNI Point of View:

  • We expect Bangko Sentral ng Pilipinas to raise its policy rate by 25bp this week, in line with consensus forecast. The move should be repeated in August, with further interest rate increases further to be data-dependent.
  • Inflationary pressures have been building, with the BSP tipping hat to emerging second-round effects. Both outgoing Governor Diokno and his successor Medalla have flagged their intention to tighten policy at the coming Monetary Board meeting.
  • Speculation surrounding the chance of an outsized move to head off inflation has now subsided as Medalla indicated Bangko Sentral's preference for "gradualism" and raising the policy rate in 25bp increments.

Please use the following link to access the full preview: MNI BSP Preview June 2022.pdf

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